Fewer Americans filed applications for unemployment benefits over the past month than at any time in seven years, a sign the labor market continues to strengthen.
The four-week average for jobless claims fell to 310,250 in the period ended May 31, the lowest since June 2007, the Labor Department reported.
The number of applications last week climbed to 312,000 from 304,000, in line with the median forecast of economists surveyed by Bloomberg News.
A drop in dismissals over time may be a sign that companies, lean from prior job-cutting, are preparing for improving demand. Sustained hiring gains now are needed to push up wages and spur increased consumer spending, which accounts for 70% of the economy.
“Fewer people are being fired, and that should be good for labor market confidence in general,” said Gennadiy Goldberg, U.S. strategist at TD Securities USA. “The onus now is on the hiring side to really drive wage growth and to drive actual improvement in the unemployment rate.”
The median forecast of 52 economists surveyed by Bloomberg projected the number of claims would increase to 310,000 last week. Estimates ranged from 300,000 to 325,000. The Labor Department revised the prior week’s reading from an initial reading of 300,000.
The number of people continuing to receive jobless benefits dropped by 20,000 to 2.6 million in the week ended May 24, the fewest since October 2007.