Weekly unemployment claims plunge to post-recession low of 284,000
Initial unemployment claims plunged last week to an eight-year low of 284,000 in a fresh sign that the recent labor market recovery is solidifying.
The number of people filing for first-time unemployment benefits was down 19,000 from the previous week’s revised level, the Labor Department said Thursday.
It was just the second time since the Great Recession that new weekly claims fell below 300,000 and bested the recovery’s previous low of 298,000 in early May. At the depths of the recession in early 2009, more than 600,000 people a week were filing for initial jobless benefits.
Last week’s big drop surprised economists, who had forecast claims to rise last week to 310,000.
The last time there were fewer claims was in February 2006 just before the housing market began the crash that triggered the recession.
Jobless claims can vary widely from week to week, particularly in the summer as the Labor Department tries to make seasonal adjustments to account for some temporary closures of factories.
But claims have been trending down in recent weeks. The four-week average, which is more stable, fell by 7,250 last week to 302,000, the lowest level since May 2007.
“Claims are often volatile in the summer because of the timing of shutdowns at auto plants for retooling, but even so the downward trend in claims is evident and very positive for the labor market and the overall economy,” said Stuart Hoffman, chief economist at PNC Financial Services Group.
The recent claims figures are consistent with monthly job growth of more than 200,000, he said.
The economy added 288,000 net new jobs in June, the fifth-straight month of payroll gains of more than 200,000.
The total number of people receiving jobless benefits also has been falling.
It dropped by 8,000 to 2.5 million in the week ended July 12, the most recent period for which figures are available. It was the fewest number of people getting unemployment checks since June 2007, the Labor Department said.
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