"The declining trend in claims is very encouraging, and is further evidence that the strong payrolls number we saw for June is not a fluke"
- Ryan Sweet, senior economist at Moody's Analytics Inc.
The number of Americans seeking U.S. unemployment benefits fell to almost the lowest level in seven years last week, a sign of increasing health in the labour market as employers are adding jobs at a healthy clip and unemployment rate is at the lowest level in more than five years. Jobless claims dropped by 11,000 to 304,000 in the week ended July 5, according to the Labor Department, beating analysts' forecast of 315,000. The four-week average, which is a less volatile measure, fell 3,500 to 311,000, the second-lowest level since August 2007. In addition, the number of workers continuing to draw jobless benefits rose by 10,000 to a seasonally adjusted 2.58 million in the week ended June 28. As demand increases, employers will likely to take on more workers, helping to lift consumer spending, which accounts for about 70% of the economy. Despite the positive data of the low claims last week, economists are projecting an uptick in the coming weeks, as the summer season is tough on jobs due to summer vacation and the auto-industry shutdown.
At 6.1%, the country's jobless rate remains historically elevated and many economists believe it overstates labour-market strength. Broader labour-market gauges show many people, who would like full-time work are stuck in part-time jobs, while others have given up their job searches.
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