The U.S. posted a better-than-expected labor market performance with a sudden drop in the number of Americans filing for unemployment benefits. The Labor Department pegged the current number of jobless claims at around 281,000, down by 15,000. Analysts believe that this is just one of several indicators of a growing economy, which has been consistently adding a solid number of jobs this year. The U.S. saw an average of 210,000 jobs created every month beginning in January continuing until June, AFP reported.
The posted improvement was better than the figures reported in the previous two weeks amid expectations of job market volatility during the summer period. It also fell below the estimated figure, which economists earlier projected to be 285,000 claims, according to The Wall Street Journal. The recent improvement also capped a positive four-week moving average of claims that show a significant labor market trend. This average fell way below the 300,000 figure, which the government considers the threshold associated with a firming labor market, according to Reuters. Unemployment claims have consistently breached this threshold for the 16th straight week.
Experts believe that the number of jobless claim indicates a continuing decline in the unemployment rate, which dropped to 5.3 percent in June, the lowest in seven years. It is also within what Federal Reserve officials consider to be consistent with full employment, CNBC learned. Economists point out that even though the improvement in the previous week may not necessarily suggest a radical change, the figures are helping sustain the declining unemployment trend.
The recent report of declining jobless claims is also buoyed by news of a firming housing sector. The U.S. dollar has also appreciated while the stock market has rallied after an agreement for a Greek bailout was reached. Wall Street reported that its quarterly profit is the highest in eight years, as reported in Reuters. "Looking forward, prospects are favorable for further improvement in the U.S. labor market and the economy more broadly," said Federal Reserve Chairwoman Janet Yellen in The Wall Street Journal.
