U.S. jobless claims dropped by 34,000 to a seasonally adjusted 303,000 last week, the lowest level in three months, the Labor Department said July 21. It was the largest decline since December 2002. The figure was better than expected on Wall Street, where economists were expecting claims to fall to about 326,000.
The four-week average of new claims -- which smoothes out one-time events that can distort the weekly figures -- dropped by 3,250 to a four-month low of 318,000 in the week ended July 16. Economists say the four-week average provides a more accurate snapshot of the labor market.
In the latest week, there were no special factors that influenced the data, such as holidays, weather or seasonal plant closings, a Labor Department spokesman said. The latest data coincide with the week of the monthly survey the Labor Department uses to construct monthly employment figures. In June, nonfarm payrolls grew by a tepid 146,000, while the jobless rate fell to a cycle low of 5%. Economists say initial claims in the range of 300,000 to 340,000 are consistent with nonfarm payroll growth of about 150,000 to 200,000 per month, strong enough to absorb new entrants into the workforce and gradually reduce the unemployment rate.
Copyright Agence France-Presse, 2005