US jobless claims fall more than consensus last week, signals recovery in jobs market

Initial jobless claims in the United States fell more than what markets had expected, last week, a sign that the country’s labor market may be recovering after a long halt.

Jobless claims fell by 4,000 to 262,000 in the week ended Aug. 13, the fewest in a month, data released by the Labor Department showed Thursday in Washington. The median forecast of 42 economists surveyed by Bloomberg called for 265,000.

Further, the figure has been below the 300,000 level for 76 consecutive weeks, the longest stretch since 1970. That is typically consistent with an improving job market.

Moreover, the number of people continuing to receive jobless benefits rose by 15,000 to 2.175 million in the week ended Aug 6, the highest level since April though still historically low. The unemployment rate among people eligible for benefits was 1.6 percent for a fourth straight week.

Economists’ estimates in the Bloomberg survey for weekly jobless claims ranged from 260,000 to 275,000. The previous week’s figure was unrevised at 266,000. The four-week moving average increased to 265,250 last week, from 262,750.

Meanwhile, the Federal Reserve July meeting minutes released Thursday showed that despite a strong rebound in job creation in June, officials remained divided on whether a broader slowdown in payroll gains this year meant the labor market was nearing full employment, or whether it was indicative of a weakening economy.

However, market participants foresee a 50-50 chance if an interest rate hike by the end of the year, based on pricing in federal funds futures.