- Ian Shepherdson at Pantheon Macro
The number of Americans seeking for unemployment benefits declined more than anticipated last week, adding to further evidence that the labour market conditions are improving. Initial claims for jobless benefits dropped 14,000 to a seasonally adjusted 298,000 for the week ended August 16, according to the Labor Department. Claims for the previous week were revised upwards by 1,000 more applications than previously reported. The four-week average of claims, considered a better measure of labour market conditions as it excludes week-to-week volatility, soared 4,750 to 300,750. However, at that level, it still remains consistent with solid job growth and claims are back at their pre-recession levels. The report also revealed that the number of people continuing to seek unemployment benefits declined by 49,000 to a seasonally adjusted 2.5 million for the week ended August 9. Hiring by U.S. companies has also increased in recent months. July marked the first time since 1997 that employers have added 200,000 or more jobs for six straight months. The U.S. unemployment rate has declined rapidly over the last year, though at 6.2% it remains at a historically high level for this point in the recovery. Broader labour-market indicators show many people, who seek full-time employment, are stuck in part-time jobs and that others have given up their job searches. Still, the improving labour market conditions are fuelling discussion inside the Fed over whether the central bank might have to hike interest rates sooner than most officials had planned.
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