The number of Americans filing applications for unemployment benefits dropped last week to the lowest level in more than eight years.
Jobless claims fell by 19,000 to 284,000 in the week ended July 19, the fewest since February 2006 and lower than any economist surveyed by Bloomberg News forecast, according to a Labor Department report.
Applications can be volatile at this time of year because of auto plant shutdowns, even as state data showed nothing inconsistent with prior years, a Labor Department spokesman said as the data was released to the press.
Companies have “been running with very tight labor force levels and now as demand starts to pick up, businesses are finding themselves in some cases very labor constrained,” said Russell Price, a senior economist at Ameriprise Financial Inc. “As we start to see the demand continue to improve, we will start to see wage gains percolate.”
The median forecast of 50 economists surveyed by Bloomberg projected 307,000 claims would be filed last week. Estimates ranged from 295,000 to 320,000. The Labor Department revised the prior week’s reading to 303,000 from an initially reported 302,000.
While the Labor Department spokesman said there was nothing unusual in the figures and no states were estimated, the timing and extent of closings to re-tool auto factories for the new model year is typically difficult for the government to gauge, causing claims to gyrate at this time of year. It will probably take several weeks for the data to stabilize enough to signal whether firings are truly ebbing.
The four-week average of jobless claims, considered a less volatile measure than the weekly figure, decreased to 302,000, the lowest since May 2007, from 309,250 in the prior week.
The number of people continuing to receive jobless benefits declined by 8,000 to 2.5 million in the week ended July 12, the fewest since June 2007. The unemployment rate among people eligible for benefits held at 1.9%, the report showed.