The drop left unemployment benefit applications at the lowest level in 10 weeks, the Labor Department said on Thursday. Some of the decline may have been caused by seasonal factors.
Still, the broader trend has been favorable. The four-week average, which smooths out fluctuations, fell 5,250, to 351,000.
“We believe labor market conditions remain on a gradually improving trajectory,” said Laura Rosner, an economist at BNP Paribas.
Weekly applications data can be volatile in July. Automakers typically shut their factories in the first two weeks of the month to prepare for new models, which leads to a temporary spike in layoffs. But this year, much of the industry has skipped or shortened the shutdowns to keep up with stronger demand.
Applications are a proxy for layoffs. They have declined 5 percent since January. The drop has coincided with stronger job growth.
Employers added an average of 202,000 jobs a month through the first six months of the year, up from an average of 180,000 in the previous six months. In June, they added 195,000 jobs.
More than 4.5 million people received unemployment aid in the week ending June 29, the latest data available. That’s down just 1,900 from the previous week. The number of recipients has fallen 21 percent in the last year.
Separately, the Conference Board, a business research group, said on Thursday that its index of leading indicators remained unchanged at 95.3 in June, pointing to modest growth in the coming months. The flat reading followed increases of 0.2 percent in May and 0.8 percent in April.
The longer-term trend has been positive. The index increased 1.7 percent in the first six months of this year. That’s better than the 1.1 percent rise in the previous six months.
The trend “suggests that the economy should continue to experience at least modest growth over the next six to nine months,” Maninder Sibia, an economist at the Economic Advisory Service, said in a note to clients.
Article source: http://www.nytimes.com/2013/07/19/business/economy/new-jobless-claims-drop-partly-for-seasonal-reasons.html?partner=rss&emc=rss