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US jobless claims dip to lowest since Feb, fuel recovery hopes
Washington, July 26: The number of Americans lodging new jobless claims plunged unexpectedly last week to the lowest level since February, bolstering hopes the economy may have finally shed the cobwebs of the `01 recession.
Washington, July 26: The number of Americans lodging new jobless claims plunged unexpectedly last week to the lowest level since February, bolstering hopes the economy may have finally shed the cobwebs of the ’01 recession.
While the labour depaed against reading too much into the improvement, saying July is always a volatile month, economists seized the surprising strength in the job market as evidence the economy is on the mend.
“I think this puts a stake in the heart of those who claim recession is still with us,” said John Lonski, chief economist at Moody’s Investors Service in New York. The level of new claims, which gives an early reading on the resilience of the job market, dropped 29,000 to 386,000 in the week of July 19, far beneath Wall Street expectations for 413,000 applications, from a revised 415,000 the week before.
New claims were at their fewest since the week of February 8, and the first time since then that they fell below the 400,000 mark, viewed by economists as the sign of a soft jobs market. Claims had been above 400,000 for 22 straight weeks.
“While breaking the 400,000 mark is a pleasant surprise, the sharp drop in jobless claims just hints that less workers are losing their jobs,” said Oscar Gonzalez, an economist at John Hancock Financial Services. “However, less firing is not the same as more hiring, so we’re still not looking at a substantial improvement in the labour market.”
A labour spokesman said it is not uncommon for data to be volatile in July “because of traditional temporary lay-offs in industries such as automobiles, textiles and apparel.” The unexpectedly steep drop boosted both the US dollar and stock market, as investors welcomed the news. Treasuries, for whom good news is bad news, were staggered.
Bureau Report
“I think this puts a stake in the heart of those who claim recession is still with us,” said John Lonski, chief economist at Moody’s Investors Service in New York. The level of new claims, which gives an early reading on the resilience of the job market, dropped 29,000 to 386,000 in the week of July 19, far beneath Wall Street expectations for 413,000 applications, from a revised 415,000 the week before.
New claims were at their fewest since the week of February 8, and the first time since then that they fell below the 400,000 mark, viewed by economists as the sign of a soft jobs market. Claims had been above 400,000 for 22 straight weeks.
“While breaking the 400,000 mark is a pleasant surprise, the sharp drop in jobless claims just hints that less workers are losing their jobs,” said Oscar Gonzalez, an economist at John Hancock Financial Services. “However, less firing is not the same as more hiring, so we’re still not looking at a substantial improvement in the labour market.”
A labour spokesman said it is not uncommon for data to be volatile in July “because of traditional temporary lay-offs in industries such as automobiles, textiles and apparel.” The unexpectedly steep drop boosted both the US dollar and stock market, as investors welcomed the news. Treasuries, for whom good news is bad news, were staggered.
Bureau Report