Initial jobless claims dropped to their lowest levels since April, ending a 15-week run in which jobless claims exceeded 400,000.
The Labor Department figures for the week ending July 23 showed that claims nationwide dropped 24,000 from the previous week to 398,000. The four-week moving average, often considered a more reliable indicator of claims, also fell 8,500 to 413,750.
Claims were down in 33 states with the largest decreases in New York and Minnesota, where claims dropped by 10,352 after government furloughs were lifted. Twenty-two states showed a rise in claims, led by California, which saw an increase of almost 21,000 claims compared with the previous week.
The decrease in jobless claims is a good sign, but it should be viewed in the context of the summer’s volatile job market, cautioned analysts John Riding and Conrad DeQuandros of RDQ Economics. Hopes that the market is picking up, “must be weighed against the caveat that the claims data in July are more volatile than usual because of summer plant shutdowns, especially in the auto sector,” they wrote in a memo about the data.
Layoffs in auto, manufacturing and other industries triggered an increase in claims in the Southeast, the data showed. Georgia, North Carolina, South Carolina, Florida, Tennessee and Alabama all reported increases of more than 1,000 claims, compared with the previous week.