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US weekly jobless claims hit more than 48-1/2-year low
[WASHINGTON] The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting its lowest level in more than 48-1/2 years, as the labour market continues to strengthen.
Other data on Thursday showed manufacturing activity in the mid-Atlantic region accelerated in July, driven by a surge in new orders received by factories. But manufacturers reported paying more for inputs.
They were less upbeat about business conditions and capital expenditures over the next six months, a sign that import tariffs were starting to hurt business sentiment.
Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 207,000 for the week ended July 14, the lowest reading since early December 1969, the Labour Department said.
Economists polled by Reuters had forecast claims rising to 220,000 in the latest week.
The second straight weekly decline in claims, however, likely reflects difficulties adjusting the data for seasonal fluctuations around this time of the year when motor vehicle manufacturers shut assembly lines for annual retooling.
With manufacturers undertaking the retooling exercise at different times in July, this can throw off the model that the government uses to the smooth the claims data for seasonal variations.
The Labour Department said only claims for Maine were estimated last week. US financial markets were little moved by the data.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,750 to 220,500 last week.
The claims data covered the survey week for the nonfarm payrolls component of July's employment report. The four-week average of claims dipped 500 between the June and July survey periods, suggesting solid job growth this month.
The economy created 213,000 jobs in June, with the unemployment rate rising two-tenths of a percentage point to 4.0 per cent as more Americans entered the labor force, in a sign of confidence in their job prospects.
Federal Reserve Chairman Jerome Powell told lawmakers this week that with appropriate monetary policy, the job market will remain strong "over the next several years."
Employment gains averaged 215,000 jobs per month in the first half of this year. The labor market is viewed as being near or at full employment. There were 6.6 million unfilled jobs in May, an indication that companies cannot find qualified workers.
That was reinforced by the Fed's Beige Book report on Wednesday showing worker shortages persisting in early July.
The US central bank said the scarcity of workers was across a wide range of occupations, including highly skilled engineers, specialized construction and manufacturing workers, information technology professionals and truck drivers.
In a separate report on Thursday, the Philadelphia Fed said its business conditions index jumped to a reading of 25.7 in July from 19.9 in June. The survey's measure of new orders increased to 31.4 from a reading of 17.9 in June.
Manufacturers also continued to report higher prices for both purchased inputs and their own manufactured goods. The survey's prices paid index soared to 62.9 this month from 51.8 in June. The index has risen 30 points since January.
The survey's index for future activity decreased for the fourth straight month.