The number of Americans filing for unemployment benefits fell more than expected last week, touching its lowest level in nearly five months, suggesting another month of strong job growth.
Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 233,000 for the week ended July 15, the Labor Department said on Thursday. That was the lowest level since February, when claims fell to 227,000, which was the best reading since March 1973.
Data for the prior week was revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had forecast claims falling to 245,000.
It was the 124th straight week that claims remained below 300,000, a threshold associated with a robust labor market. That is the longest such stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the jobless rate at 4.4 percent.
Claims are volatile early in the summer when automakers shut assembly plants for annual retooling. A Labor Department official said there were no special factors influencing the claims data and that no states had been estimated.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,250 to 243,750 last week.
Last week’s claims data covered the survey period for July’s nonfarm payrolls. The four-week average of claims fell 1,250 between the June and July survey periods, suggesting strong job gains in July.
The economy created 222,000 jobs last month, the second biggest payrolls increase this year.
Economists believe that labor market strength likely keeps the Federal Reserve on track to raise interest rates for a third time this year and announce a plan to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities, despite a recent ebb in inflation pressures.
Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid rose 28,000 to 1.98 million in the week ended July 8. The so-called continuing claims have now been below 2 million for 14straight weeks, pointing to shrinking labor market slack. The four-week moving average of continuing claims increased 8,750 to 1.96 million, remaining below the 2 million mark for 12consecutive weeks.