U.S. jobless claims drop sharply last week

WASHINGTON, July 8 (BestGrowthStock) – New U.S. claims for
unemployment insurance fell more than expected last week,
government data showed on Thursday, while the number of people
continuing to receive benefits in the final week of June was
the lowest in seven months.

Initial claims for state unemployment benefits dropped
21,000 to a seasonally adjusted 454,000 in the week ended July
3, the lowest level since early May, the Labor Department
said.

Analysts polled by Reuters had expected claims to fall to
460,000 from the previously reported 472,000, which was revised
up to 475,000 in Thursday’s report.

The four-week moving average of new jobless claims, seen as
a better measure of underlying labor market trends, fell 1,250
to 466,000.

Although a Labor Department official said there was nothing
unusual in the report, the decline in claims could have been
exaggerated by the fact that General Motors is limiting its
annual summer plant shutdown.

General Motors announced last month that nine of its 11
domestic assembly plants would continue operating during the
June 28 to July 9 shutdown to meet demand for some models.

Automakers use the summer shutdowns to complete the annual
model changeover and support maintenance operations, and
analysts have cautioned that this might distort claims data
over the coming weeks and make it difficult to get a clear
pulse of the jobs market’s health.

A sluggish labor market is blunting the economy’s recovery
from the longest and deepest recession since the 1930s. High
unemployment is putting a damper on spending, fanning fears
among investors the economy could fall back into recession.

Last month, private hiring rose by 83,000 after rising only
33,000 in May, the government said on Friday. But total
non-farm employment dropped 125,000 as the government laid off
225,000 temporary census workers.

Although layoffs have abated, claims for jobless benefits
have not declined significantly this year, and analysts say
this implies only a gradual labor market improvement.

The number of people still receiving benefits after an
initial week of aid dropped 224,000 to 4.41 million in the week
ended June 26, the lowest since November last year, the Labor
Department said. The level was way below market expectations
for 4.60 million.

The insured unemployment rate, which measures the
percentage of the insured labor force that is jobless, fell to
3.4 percent in the week ended June 26 from 3.6 percent the
prior week.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. jobless claims drop sharply last week