New Unemployment claims drop in the US

Unemployment Claims

Unemployment Claims

NEW claims for US unemployment insurance benefits unexpectedly dropped to a five-year low.

The number of applications dropped from 345,000 to 326,000 for the week ending July 27. The reading was the lowest since January 19, 2008, when claims stood at 321,000 amid the financial crisis. Analysts on average had expected a slight rise to 345,000 claims from the unrevised prior week’s figure of 343,000.

For the first time jobless claims have been trending lower as the labor market slowly recovers from the Great Recession that ended four years ago.

The biggest increases in initial claims for the week that ended July 20 were in California, Missouri and Kansas with gains of 7,723, 635, and 427, respectively.
The biggest decreases were in New York, Pennsylvania and Alabama with 14,966 fewer claims, 8,817 fewer and 6,019 fewer, respectively.

On Thursday the Labor Department stated that the less volatile four-week average fell by 4,500 to 345,750. The figures for July are typically volatile as the government has a tough time adjusting for seasonal layoffs in the auto industry.

However, the trend in weekly unemployment claims has been positive and offered hope that a better job market can bolster a weak economy. Applications, which are a proxy for layoffs, have fallen more than 12 percent this year. There has been an average gain of 202,000 jobs a month since January, up from an average of 180,000 in the previous six months.

Analysts forecast 183,000 jobs were added last month, and the unemployment rate fell to 7.5 percent from 7.6 percent in June.

‘‘The labor market continues to improve moderately,’’ Sal Guatieri, senior economist with BMO Capital Markets, wrote in a note to clients.

Despite a sluggish economy, hiring has remained steady. According to the Commerce Department the economy grew by an annual rate of only 1.7% in the second quarter, while first quarter growth was revised down to 1.1%.

Stating a very modest growth, the Federal Reserve downgraded its assessment of the strength of the economy. The Fed hopes growth will accelerate in the second half of the year.

At present the central bank is not ready to slow its bond purchases, which have helped reduce interest rates and encourage more borrowing and spending. Speculations are rife that the Fed will relax its aggressive bond buying program as early as September. However the Fed has stated it sees no reason to roll back its $85-billion-a-month purchases due to the slow growth of the economy.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Why Is Squid Game So Popular?

Why Is Squid Game So Popular?

The Squid Game segments were watched by at least 132 million people in the first 23 days of the show on Netflix. Know what excited the viewers.
18 hours ago
Amazon under Congressional scrutiny for pushing own products over others

Amazon under Congressional scrutiny for pushing own products over others

US judiciary Antitrust Committee writes a letter saying that Amazon is given time till November 1 to prove that it utilizes seller data available to create competing products and p
2 days ago
Porsche’s Taycan EV outsells ICE powered its 911 sports car

Porsche’s Taycan EV outsells ICE powered its 911 sports car

The Porsche Taycan EV has outsold the Porsche 911 sports car for the first time since it was introduced in 2019 by the German automaker.
3 days ago
Tesla expected to make a killing in Bitcoin profits in next earning report

Tesla expected to make a killing in Bitcoin profits in next earning report

The price of Bitcoins has rallied to another high in October after hitting around $64,800 in April. This time it has hit over $58,000 on Oct. 14.
4 days ago
Tesla Cybertruck V/s Rivian’s R1T

Tesla Cybertruck V/s Rivian’s R1T

The Tesla Cyberturck left many disappointed with its alien space ship-like design; though both trucks are still under production, what matters most is what comes under the hood.
5 days ago
College sports is multibillion dollar industry in the US

College sports is multibillion dollar industry in the US

According to data analyzed by GOBankingRates, head football coaches, closely followed by basketball coaches, easily rack up seven-figure salaries in the US.
6 days ago