Major Job Claims Drop Unexpected

Despite more than 30,000 seasonal model-changeover and retooling layoffs among Michigan-based automakers and suppliers, initial claims for unemployment insurance fell 30,000 last week to 304,000, the U.S. Department of Labor reported on July 20. Economists generally had expected a decline from the previous week to about 320,000 claims, 16,000 higher than the actual number.

The department's four-week moving average of first-time claims also fell last week, decreasing by 1,250 to 316,750 from the previous week's revised figure of 318,000.

These data suggest that the U.S. economy is creating jobs at a rate above 150,000 per month, the level needed to keep up with population growth. However, in recent months, the number of jobs created has been less than the unemployment claims data would suggest.

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