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US jobless claims drop to two-month low as labour market firms
[WASHINGTON] The number of Americans filing for unemployment benefits unexpectedly fell last week to a two-month low, pointing to labour market strength that could pave the way for the Federal Reserve to raise interest rates by December.
Initial claims for state unemployment benefits declined 8,000 to a seasonally adjusted 252,000 for the week ended Sept 17, the Labour Department said on Thursday, the lowest level since mid-July. Claims for the prior week were unrevised.
It was the 81st consecutive week that claims remained below the 300,000 threshold, which is associated with robust labour market conditions. That is the longest stretch since 1970, when the labour market was much smaller.
The Fed left interest rates unchanged on Wednesday, but strongly signaled it could raise borrowing costs by the end of the year, citing a recent pickup in economic growth and continued progress in the labour market.
Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 262,000 in the latest week. A labour Department analyst said there were no special factors influencing last week's data and only claims for South Carolina had been estimated.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 2,250 to 258,500 last week.
Last week's claims data covered the survey period for September's nonfarm payrolls. The four-week average of claims fell 6,750 between the August and September survey periods, suggesting a pickup in job growth this month. Payrolls increased by 151,000 jobs in August.
While the pace of job growth has slowed from a monthly average of 186,000 in the first seven months of the year, it is well above the roughly 100,000 that Fed Chair Janet Yellen says is needed to absorb new entrants in the job market.
Thursday's claims report also showed the number of people still receiving benefits after an initial week of aid fell 36,000 to 2.11 million in the week ended Sept 10. The four-week average of the so-called continuing claims dropped 8,000 to 2.14 million.