Jobless claims in US decline to lowest level since 2007

Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 320,000, the lowest level since October 2007

Claims for jobless benefits unexpectedly dropped last week to the lowest level in almost six years, signalling the US job market continues to mend.

The number of applications for unemployment insurance payments declined by 15,000 to 320,000 in the week ended August 10, the fewest since October 2007, from a revised 335,000, a US Labor Department report showed in Washington on Thursday. The median forecast of 44 economists surveyed by Bloomberg called for 335,000. There was nothing unusual in the data and no states were estimated, a Labor Department spokesman said as the data was released to the press.  The slowdown in firings may be a precursor to a pick-up in hiring, which would bolster household incomes and spending. Fewer dismissals are also helping boost consumer confidence as growth in the world’s largest economy shows signs of picking up in the second half of 2013.

“The labour market is improving,” said Brian Jones, a senior US economist at Societe Generale in New York, who projected 322,000, the closest of all economists surveyed by Bloomberg. “We’ve got decent momentum on consumer spending” heading into the third quarter, he said.

Another Labor Department report on Thursday showed the consumer- price index increased 0.2 per cent in July after a 0.5 per cent gain the prior month. The advance matched the median forecast of 82 economists surveyed by Bloomberg. The core measure, which excludes food and fuel, also climbed 0.2 per cent from June.

Manufacturing expands
Manufacturing in the New York region expanded in August for a third month, another report showed. The Federal Reserve Bank of New York’s general economic index fell to 8.2 from 9.5 last month. Readings greater than zero signal expansion in New York, northern New Jersey and southern Connecticut.

Stock-index futures dropped, adding to earlier losses, after the reports signaled an improving US economy may prompt Federal Reserve policy makers to curtail monthly bond purchases. The contract on the Standard & Poor’s 500 Index maturing in September dropped 0.8 percent to 1,668.3 at 8:47 am in New York.

Last week’s claims reading was lower than any economist in the Bloomberg survey projected. Estimates ranged from 322,000 to 347,000. The Labor Department revised the previous week’s figure from an initially reported 333,000.