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US jobless claims fall 8,000 in latest week

Initial claims for state unemployment benefits fell for the second straight week, dropping to 301,000 in the week ended July 14 from an upwardly revised 309,000 claims the prior week and the lowest level since mid-May, the Labour Department said.

“It is still a mixed job picture,” said Robert Brusca, chief economist for Fact and Opinion Economics in New York.

“Claims are falling and continued claims continue to creep up. This suggests that people are receiving their claims longer than before,” Brusca said. “Still the job market has reasonably strength,” he added.

US Treasury debt prices traded fairly steady at lower levels after the release of the data. Stock futures showed little reaction.

Economists polled by Reuters forecast that initial claims would rise slightly to 311,000 from the original reading of 308,000 in the week ended July 7.

Analysts have said that July is typically a volatile month as auto plants and other factories shut down for retooling, resulting in temporary rises in claims followed by drop-offs as plants start back up.

“The distortions caused by the annual auto retooling shutdowns are so big that these data should be ignored,” said Ian Shepherdson, chief US economist for High Frequency Economics in Valhalla, New York.

“There is no way to extract the underlying trend in claims from the numbers; we’ll need to wait another couple of weeks before the distortions fade sufficiently to have any confidence that the claims numbers are telling us anything about the true state of the labor market,” Shepherdson said in a note to clients.

The four-week moving average, a more reliable gauge because it irons out much of the weekly fluctuations, fell to 312,000 from 318,250 the previous week.

The number of workers remaining on benefit rolls after drawing an initial week of aid rose 20,000 to 2.57 million in the week ended July 7, the latest period for which figures were available. The rise pushed the so-called continued claims to their highest level in three months.

Economists forecast continued claims at 2.55 million.