According to the US Department of Labor (DoL), initial applications for unemployment benefits plunged by 29,000 to 386,000 in the week ending July 19, down from a revised 415,000. That was not only the lowest since February 8, it was the first time in more than five months that the figure dropped under the all-important 400,000 benchmark – widely seen as the dividing line between a healthy job market and a slumbering one.
The fall brought the moving average weekly rate of initial claims over the past four weeks to 419,250, down from 424,750 in the prior four-week period. Some economists consider the four-week average a better indicator because it irons out weekly volatility.
The number of people clinging to the unemployment rolls during the week ending July 12 – the latest available data – was 3.6 million, down 24,000 from the preceding week’s revised 3.62 million.
The July 19 claims were also far below the expectations of economists participating in Reuters’ regular poll who had been looking for a 413,000 total.
The latest DoL report follows data for the July 12 week showing a 29,000 claim decline, but with the total still stuck above 400,000. (See Jobless Claims Turn Down ).