Jobless Claims Edge Up Slightly

The number of Americans filing new claims for unemployment benefits edged up slightly last week but remained at a level indicating a strong labor market.

The Labor Department reported that 310,000 newly laid off workers applied for jobless benefits last week. That was a small increase of 5,000 claims, but it occurred after a dramatic drop of 32,000 in the previous week and left claims at a level indicating the labor market remained healthy.

A flurry of indicators in recent weeks have flashed signals that the economy had successfully emerged from a rough patch in the spring and was entering the second half of the year with renewed momentum.

The small 5,000 rise in claims last week was better than the 17,000-claims increase that analysts had been expecting. Government analysts said that there were fewer layoffs in autos and large number of other industries.

The 310,000 total claims came after 305,000 claims the previous week. Both weeks represented the lowest level for claims in the past three months. The four-week moving average for claims edged down to 318,250 from 318,500 the previous week.

Private analysts said the low level of layoffs in the past two weeks showed that the labor market was improving after extensive plant shutdowns in the auto industry in July for retooling for the new model year.
Stephen Stanley, chief economist for RBS Greenwich Capital, predicted that employment growth in coming months would average around 180,000 jobs per month, the same average as the past 18 months and enough to keep the unemployment rate moving lower. Stanley said there was nothing in the jobless claims report "to suggest that labor demand is cooling."

The jobless rate for June fell to 5 percent, the lowest level in nearly four years as the labor market continues to improve after a prolonged period of a jobless recovery in which businesses kept laying off workers even though the economy was growing again following the 2001 recession.

There were renewed concerns about growth this spring when industrial production faltered as businesses struggled to cope with unsold inventories and a big jump in energy costs.

However, the government reported Wednesday that new orders for big-ticket manufactured goods rose a solid 1.4 percent in June following an even bigger 6.4 percent increase in May.

Many analysts believe the economy grew by a solid 3.5 percent in the April-June quarter following growth of 3.8 percent in the first three months of the year. The government will provide its first look at the performance of the gross domestic product on Friday.