Unemployment Benefits Claims Down Again as Job Market Strengthens
Jobless claims declined by 11,000 to 304,000 in the week ending July 5, the fewest in more than a month, a Labor Department report has shown. The drop in firings signals a rebound in second- half economic growth. As demand improves, employers will probably take on more workers, helping to lift consumer spending, which accounts for about 70 percent of the economy.
The previous week’s figure was unrevised at 315,000. The four-week moving average, a less volatile measure than the weekly figures, dropped to 311,500 last week from 315,000. The number of people continuing to receive jobless benefits rose by 10,000 to 2.58 million in the week ended June 28. Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate.
The number of applications is unlikely to keep dropping as unemployment claims around 300,000 are close to a record low relative to the overall level of employment. Payrolls expanded by 288,000 workers in June following a 224,000 gain the prior month that was bigger than previously estimated. The jobless rate dropped to 6.1 percent from 6.3 percent.
Gross domestic product is expected to expand 3.1 percent from July through December following a 3.3 percent advance last quarter, according to the median forecast of 74 economists polled from July 3 through July 9. It would be the first time since 2004-2005 that GDP has sustained such gains over an extended period.