By Jason Lange
WASHINGTON — The number of Americans filing new claims for unemployment benefits fell last week to nearly its lowest level since before the 2007-09 recession, a sign of growing steam in the U.S. labor market.
Initial claims for state unemployment benefits dropped 1,000 to a seasonally adjusted 287,000 in the week ended Oct. 4, the Labor Department said Thursday. Economists had expected claims to rise.
The data adds to the view that strength is building in the U.S. economy. “The labor market is entering into a potential boom,” said Joseph LaVorgna, chief U.S economist at Deutsche Bank (DB) in New York.
Still, Federal Reserve officials remain concerned about persistently low rates of inflation and aren’t seen in a rush to hike interest rates with the economies of key trading partners flagging.
A separate report showed U.S. wholesale inventories rose by the most in four months in August, a sign the economy may have grown more than expected in the third quarter.
Many economists think the economy grew at an annual rate of around 3 percent in the July-September period, much faster than average rates over the last few years.
U.S. stocks opened lower as investors took profits after a big rally Wednesday that had been fueled by minutes of the Fed’s last policy meeting, which suggested an interest rate hike could be delayed because of growing concerns on the international outlook.
The U.S. dollar, which had been on a long run up through last week, slid to a three-week low against the Japanese yen Thursday, while yields on U.S. government debt rose modestly.
Jobless claims have fallen steadily since the nation emerged from the recession and are currently lower than they were before the country’s economic crisis began. Indeed, the level of claims last week was just 8,000 above a 14-year low reached in July.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 7,250 to 287,750, its lowest level since 2006.
The Labor Department said there were no special factors influencing the state level claims data.
The report showed the number of people still receiving benefits after an initial week of aid dropped 21,000 to 2.38 million in the week ended Sept. 27.
“The gradual improvement in continuing claims is particularly encouraging and is consistent with recent declines in the unemployment rate, suggesting that unemployed workers continue to find gainful employment,” said Gennadiy Goldberg, U.S. strategist at TD Securities in New York.
–With additional reporting by Richard Leong in New York.