Jobless claims have hovered above the 400,000 mark since hitting a three-year… (Matthew Staver, Bloomberg )
WASHINGTON — New applications for unemployment benefits fell last week to the lowest level in three months, suggesting fewer layoffs in early July than usual, according to government data.
Initial claims for state benefits dropped 22,000 to a seasonally adjusted 405,000 in the week that ended July 9, the Labor Department said Thursday. That's the smallest amount of new applications since mid-April.
Economists surveyed by MarketWatch had expected new requests for jobless benefits to total 420,000. Claims in the prior week were revised up to 427,000 from an original reading of 418,000.
The average of new claims over the last four weeks, meanwhile, dropped a much-smaller 3,750 to 423,250. The four-week average is seen as a more accurate barometer of labor trends because it smooths out week-to-week volatility in the data.
The decline in last week's claims would have been even steeper if not for a government shutdown in Minnesota that was triggered by a budget standoff. Minnesota said 11,500 state workers filed applications for jobless benefits last week.
In most years, jobless claims tend to rise in July as many manufacturers shutter plants to retool them for new products, such as the latest auto models. Yet a Labor Department official said claims did not increase as much as they usually do.
Still, jobless claims have hovered above the 400,000 mark since hitting a three-year low of 375,000 in late February. When the U.S. economy creates lots of new jobs, new applications for unemployment benefits usually drop well below 400,000 for a prolonged period.
Bartash writes for MarketWatch.com/McClatchy.