U.S. jobless claims rise slightly, labor market firming

WASHINGTON, Aug 2 (Reuters) - The number of Americans filing for unemployment benefits rose less than expected last week, pointing to sustained strength in the labor market.

Initial claims for state unemployment benefits increased 1,000 to a seasonally adjusted 218,000 for the week ended July 28, the Labor Department said on Thursday. Data for the prior week was unrevised.

Claims dropped to 208,000 during the week ended July 14, which was the lowest reading since December 1969. Economists polled by Reuters had forecast claims rising to 220,000 in the latest week.

Claims data has been volatile in recent weeks because of difficulties adjusting the data for seasonal fluctuations at the start of July when motor vehicle manufacturers close assembly lines for retooling.

The Labor Department said only claims for Maine were estimated last week. 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 3,500 to 214,500 last week, the lowest reading since mid-May.

The Federal Reserve on Wednesday left interest rates unchanged while offering an upbeat assessment of both the labor market and economy. The U.S. central bank said "the labor market has continued to strengthen and economic activity has been rising at a strong rate."

Many economists expect the Fed to hike rates in September for the third time this year.

Last week's claims data has no bearing on July's employment report, which is scheduled for release on Friday, as it falls outside the survey period. According to a Reuters survey of economists, nonfarm payrolls likely rose by 190,000 jobs in July after increasing by 213,000 in June.

The unemployment rate is forecast falling one-tenth of a percentage point to 3.9 percent in July. Job growth averaged 215,000 per month in the first half of this year and the labor market is viewed as being near or at full employment.

The claims report also showed the number of people receiving benefits after an initial week of aid fell 23,000 to 1.72 million in the week ended July 21. The four-week moving average of the so-called continuing claims slipped 4,500 to 1.74 million.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci; Lucia.Mutikani@thomsonreuters.com; 1 202 898 8315; Reuters Messaging: lucia.mutikani.thomsonreuters.com@reuters.net)