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August 8, 2019 11:00 AM, EDT

Drop in Jobless Claims Shows Firm Labor Market

Jobless David Paul Morris/Bloomberg News

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Applications for U.S. unemployment benefits declined for the second time in three weeks, indicating the labor market is holding steadfast in the face of slower global demand and trade tensions.

Jobless claims fell to 209,000 in the week ended Aug. 3, according to Labor Department figures Aug. 8 that were better than the most optimistic projection in Bloomberg’s survey of economists. The four-week average, a less-volatile measure, was little changed and near the lowest since April.

The level of claims adds to signs that that the labor market remains strong, a characterization that Federal Reserve officials repeated in their last policy statement. Job gains moderated to a still-solid 164,000 in July and the unemployment rate remained near a half-century low.

Claims are hovering just above a 49-year low of 193,000 in April and the latest reading compares with the average reading of about 218,000 this year.

“There remains very little evidence that the economy here is weakening beyond what was long expected,” Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a note. “In past cycles, initial claims have often been the canary in the coal mine for impending weakness, so the lack of movement here is good news for the economy.”

Continuing claims, reported with a one-week lag, dropped by 15,000 to 1.68 million in the week ended July 27.

The unemployment rate among people eligible for benefits held at 1.2%, where it has been for more than a year.