Spikes in the number of initial claims in recent weeks have been attributed to temporary shutdowns at auto plants and other manufacturers who are equipping their factories for production of new models. These closings have since moderated, resulting in the drop-off in claims.
For the week ending July 21, the number of initial jobless fell by 51,000 to 366,000 from a revised 417,000 claims reported the previous week, the lowest since 365,000 initial claims were filed during the March 24 week.
The number came in below the expectations of analysts polled by Reuters who forecast a dip to 405,000.
Nonetheless, the four-week moving average, a more reliable barometer of unemployment trends, came in at 409,000, slightly lower than the previous week but still above the crucial 400,000 level many economists closely watch as the labor market weakens.
The number of the unemployed lining up for another week of benefits fell by 17,000 to 3,087,000 for the week ended July 14, the most recent week for which data is available. For the fourth consecutive week these continued claims were above three million, a sign of a stagnant labor market.