Fewer Americans filed applications for unemployment benefits last week, sending the average over the past month to an eight-year low, a sign the labor market continues to gain momentum.
Jobless claims decreased by 14,000 to 289,000 in the week ended Aug. 2 from 303,000 in the prior period, the Labor Department reported. The median forecast of 47 economists surveyed by Bloomberg News called for an increase to 304,000.
Companies are holding on to more workers in an effort to keep up with increased orders and stronger consumer demand, contributing to a virtuous cycle of growth as the economy accelerates. Fewer layoffs and more jobs would support further gains in incomes and household spending, which accounts for 70% of the economy.
“Demand for labor is continuing to improve -- we see that in virtually every report,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said. “The current level of layoffs is very low and consistent with a pretty healthy job market.”
Estimates in the Bloomberg survey ranged from 290,000 to 315,000. The prior week’s claims were revised from an initial reading of 302,000.
The four-week average, a less-volatile measure than the weekly figure, dropped to 293,500, the lowest since February 2006, from 297,500 the week before.
The number of people continuing to receive jobless benefits declined by 24,000 to 2.52 million in the week ended July 26.