US jobless claims fall to near 2-yr low last week

WASHINGTON, July 15 (BestGrowthStock) -New U.S. claims for
unemployment insurance fell more than expected last week to
their lowest level in nearly two years as seasonal layoffs
eased at factories, government data showed on Thursday.

Initial claims for state unemployment benefits dropped
29,000 to a seasonally adjusted 429,000 last week, the lowest
since late August 2008, the Labor Department said.

Analysts polled by Reuters had expected claims to fall to
450,000 from the previously reported 454,000, which was revised
up to 458,000 in Thursday’s report.

The four-week moving average of new jobless claims,
considered a better measure of underlying labor market trends,
fell 11,750 to 455,250.

New claims for jobless benefits normally rise this time of
the year as manufacturers, including auto makers, implement
annual shut downs. However, General Motors is keeping the
majority of its plants open during the annual summer retooling
shutdown to meet demand for some models.

A Labor Department official said layoffs that are normally
scheduled for this time of the year did not appear to have
materialized.

“This not just a General Motors thing, we are seeing this
across a swathe of states, we did not see an increase in claims
as we would normally,” the official said.

The weak labor market, characterized by a 9.5 percent
unemployment rate, is holding back the economy’s recovery from
the most painful recession since the 1930s.

Lack of income has caused consumer spending to turn
sluggish in the past months, prompting economists to trim down
their growth forecasts for the second quarter.

Federal Reserve policy makers, according to minutes of
their June 22-23 meeting released on Wednesday, felt they
should be ready to consider additional steps to boost the
economy if the already weak outlook worsened.

Claims for jobless benefits have been above levels that are
normally associated with sustainable job growth, even though
companies are no longer aggressively dismissing workers.

In the week ended July 3, the number of people still
receiving benefits after an initial week of aid jumped 247,000
to 4.68 million, the Labor Department said. The level was well
above market expectations for 4.41 million.

The insured unemployment rate, which measures the
percentage of the insured labor force that is jobless, rose to
3.7 percent during that period from 3.5 percent in the prior
week.

The number of people on emergency benefits dropped 236,162
to 3.91 million in the week ended June 26. Concerns over the
country’s massive budget deficit are frustrating efforts to
extend jobless aid to millions of Americans whose benefits have
run out. Analysts fear the impasse could further weigh on
consumer spending.

According to Labor Department data, about 45 percent of the
14.6 million people unemployed in June had been out of work for
six months or more.

Investing Analysis
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

US jobless claims fall to near 2-yr low last week