By Dow Jones Business News,
July 10, 2014, 08:55:00 AM EDT
WASHINGTON--New applications for unemployment benefits fell last week, a sign the labor market continues to
Initial claims for unemployment benefits decreased by 11,000 to a seasonally adjusted 304,000 in the week ended July
5, the Labor Department said Thursday. That matched the third-lowest reading this year and was lower than the 319,000
new claims forecast from a survey of economists by The Wall Street Journal.
The four-week moving average of claims, which smooths out weekly volatility, fell by 3,500 to 311,500. Claims for the
week ending June 28 were unrevised at 315,000.
"The claims data remain extremely encouraging," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics.
Benefit claims, a proxy for layoffs, can be volatile around this time of year because of the shifting timing of
vacation periods and summer shutdowns in auto manufacturing. For the week ended June 28, the Labor Department said New
Jersey and Massachusetts had both noted a spike in education-related layoffs.
Some economists expect an uptick in claims in the coming weeks. "Sooner or later...the auto shutdowns will hit the
claims data," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. But Mr. Shepherdson added he sees a "
favorable underlying trend" in the data.
Hiring has also picked up recently, with employers adding well over 200,000 jobs a month for the past five months.
Federal Reserve officials noted the labor-market improvements at a June meeting in which they decided to end their
bond-buying program in October, meeting minutes released Wednesday showed. Most officials at the June meeting, however,
indicated they don't expect the Fed's first rate hike to come before next year.
At 6.1%, the nation's unemployment rate remains historically elevated and many economists believe it overstates labor-
market health. Broader labor-market gauges indicate many people who would like full-time employment are stuck in part-
time jobs, while others have given up their job searches..
Thursday's claims report showed the number of workers continuing to draw unemployment benefits rose by 10,000 to a
seasonally adjusted 2.58 million in the week ended June 28. Those figures are reported with a one-week lag.
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