US Weekly Jobless Claims Remain Below 300,000

Recent reports from the labor department have revealed a drop number of Americans filing for unemployment benefits last week as the Labor Department released a report showing weaker than expected job growth in the month of August. The report said non-farm payroll employment climbed by 151,000 jobs in August after surging up by an upwardly revised 275,000 jobs in July. Economists had expected an increase of about 175,000 jobs compared to the jump of 255,000 jobs originally reported for the previous month.

This hints at a level of stability in the US labor market despite the recent slowing in the pace of US job growth. Initial claims for state unemployment benefits decreased 4,000 to a seasonally adjusted 259,000 for the week ended Sept. 3, the lowest level since mid-July, the Labor Department said on Thursday. Claims for the prior week were unrevised. Economists in a poll conducted by Reuters had forecast first-time applications for jobless benefits rising to 265,000 in the latest week.

This release is the 79^th consecutive figure that stands below the value of 300,000, a direct outcome of the healthy condition of the labor market, this is the longest streak since 1970, when the US had a considerably smaller labor market.

A Labor Department analyst said “there were no special factors influencing last week's claims data. However, claims for Virginia, New Mexico, Alabama and Minnesota, as well as those for Hawaii and Puerto Rico were estimated because Monday's Labor Day holiday had caused delays in the processing of the data. The estimates are based on historical trends and normally do not deviate much from the actual data”. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,750 to 261,250 last week.

The four-week moving average also fell to 261,250. The health of the US jobs market is a key factor in US policymakers' decisions concerning interest rates, which are due to be reviewed later this month. Hiring in August produced 151,000 new positions, according to figures released last week, still solid but well below July's level and below analyst expectations. The economy created 151,000 jobs in August, still well above the roughly 100,000 jobs that Federal Reserve Chair Janet Yellen says is needed to keep up with growth in the working age population.

The Labor Department also said the unemployment rate held at 4.9% in August, unchanged from the previous month. The unemployment rate had been expected to edge down to 4.8%. As the labor market nears full employment, there is probably not much room for further declines in claims. A report on Wednesday showed job openings hit a record high in July, though hiring continued to lag, suggesting a possible skills mismatch.

The very low level of claims together with all-time high job openings suggests the labor market remains healthy, even though employment growth moderated in August after payroll gains averaged 273,000 jobs per month in June and July.