The number of Americans filing new applications for unemployment benefits fell more than expected last week, pointing to a solid labor market.
Initial claims for state unemployment benefits dropped 15,000, to a seasonally adjusted 281,000 for the week ended July 11, the Labor Department said on Thursday.Analysts had forecast 285,000 new applications.
The decline reversed the prior week’s rise and ended three straight weeks of increases.
Claims tend to be volatile during the summer when automakers normally shut assembly plants for annual retooling. However, some of the companies keep production running, which can throw off a model the government uses to smooth the data for seasonal fluctuations.
A Labor Department analyst said there were no special factors influencing the data and no states had been estimated.
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The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, increased 3,250 to 282,500 last week.
It was the 16th straight week that the four-week moving average of claims held below 300,000, a threshold normally associated with a firming labor market.
While job growth has cooled from last year’s robust pace, there is little doubt that the labor market is tightening.
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The current unemployment rate is 5.3 percent, within striking distance of the 5.0 percent to 5.2 percent range that most Federal Reserve officials consider consistent with full employment.