On Thursday, according to the Department of Labor, initial claims for state unemployment benefits dropped 18,000 to a seasonally adjusted 214,000 in the in the seven days ended July 7, compared to an expectation of about 225,000 new jobless claims. According to economists’ calculation, the number of claims that is below around 300,000 means that unemployment will stay steady or fall.
The results reached the lowest level since early May. Last year, the weekly claims numbers have been declining, which was lower than 250,000 each week since last September and keep around the lowest level since 1969.
In addition, a better measure of labor market trend, the four-week moving average of initial claims, dropped 1,750 to 223,000 last week. Claims data for the prior week was revised to 232,000 from 231,000. The Labor Department also said that claims for Maine and Hawaii were estimated last week.
The decline in new jobless claims is a good sign, which suggests that the job creation is high and layoffs are less. According to Jim O'Sullivan, which is the chief U.S. economist for High Frequency Economics, the new release on Thursday is a sign that “more than enough strength in employment growth to keep the unemployment rate trending down”.
In June, 213,000 jobs were created, and the unemployment rate rose from 3.8% in May to 4.0% in June.