WASHINGTON (LA Times) — Initial claims for unemployment insurance fell sharply last week and are approaching the level consistent with strong job growth.
There were 359,000 people who filed for jobless benefits for the first time in the week that ended Saturday, down 26,000 from the previous week’s adjusted level, the Labor Department said Thursday.
It was the lowest number of new claims since the week that ended July 21, when 357,000 people filed.
The drop last week was much more than expected. The median estimate in a Bloomberg survey of economists was for 375,000 new claims.
Initial filings of about 350,000 or less in a week indicate the economy is poised for stronger hiring that could bring down the unemployment rate. But the weekly figures can vary widely, and several more weeks at that level would be needed to indicate a trend.
The less volatile four-week average was 374,000, down 4,500 from the previous week.
The national unemployment rate was 8.1 percent in August as the economy has struggled to create new jobs. It was the 43rd straight month the rate was above 8 percent, the longest such stretch since the Labor Department began tracking the figure in 1948.
Concerned about the sluggish pace of job growth, the Federal Reserve said this month it would launch a new round of stimulus designed to help bring the unemployment rate down.
Although jobless claims were down last week, the large tax hikes and big government spending cuts looming at the end of the year could make businesses hesitant to hire new workers.
A quarterly survey of large company chief executives released Thursday by the Business Roundtable showed more pessimism about the direction of the economy. Only 29 percent of the chief executives said they would add workers in the next six months, down from 36 percent the previous quarter.
About a third of the chief executives — 34 percent — said they expected to cut jobs in the next six months.