Weekly Jobless Claims Fall to Lowest Level in Over 41 Years

Labor Department reports on weekly jobless claims, otherwise known as first-time jobless claims. (Photo: Reuters)

Weekly jobless claims for state unemployment benefits fell 26,000 to a seasonally adjusted 255,000 for the week ended July 18, the Labor Department said. The report claims the number of Americans filing new applications for unemployment benefits fell to its lowest level in more than 41-1/2 years.

Claims for the prior week, which came in at 281,000, were unrevised. However, the latest numbers undoubtedly exaggerates the strength of the labor market, because claims are volatile during summer when automakers usually shut assembly plants for annual retooling. The four-week moving average of claims — which is widely considered to be a better gauge of overall labor market conditions — fell only 4,000 to 278,500 last week.

The four-week average has been below the 300,000 threshold, which is normally associated with sturdy job gains, for 17 consecutive weeks.

Though a Labor Department analyst said there were no special factors influencing the data and that only claims for Puerto Rico had been estimated, some firms have kept production lines running, which throws off a model the government uses to smooth the data for seasonal variations.

The claims data covered the period during which the government surveyed employers for the nonfarm payrolls portion of July’s employment report. Despite the fact that the four-week moving average of claims increased 1,500 between the June and July survey periods, payroll growth likely remained above the 200,000 threshold this month.

Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid fell 9,000 to 2.21 million in the week ended July 11.