Employment data raises hopes that US economy is improving

Ben Southwood
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THE number of Americans filing new claims for jobless benefits fell last week to near a four-year low but an unusual pattern for summer factory shutdowns kept hopes in check that the weak labor market was improving.

The labour market has suffered three months of sub-100,000 job growth as the economy slowed amid a cloud of uncertainty spawned by fears of sharp contraction in fiscal policy and debt problems in Europe.

Last week, initial claims for state unemployment benefits dropped 35,000 to a seasonally adjusted 353,000, the Labor Department said. That was a much sharper drop than economists expected.

The reading for jobless claims has been volatile this month because of the timing of the annual auto plant shutdowns for retooling. The number of new claims had touched a four-year low in the 7 July Week at 352,000. One measure that tries to smooth out this volatility, the four-week moving average, fell 8,750 last week to 367,250.

“Jobless benefit claims numbers provide further encouraging news on the US economy, building on better than expected growth of durable good orders seen in June,” said Chris Williams at Markit.