In a note to clients previewing the data, Deutsche Bank’s Joe LaVorgna wrote, “At present, the four-week average of initial jobless claims (275k) remains near a 42-year low, and employee tax receipts continue to grow at a 5%-plus annual rate”. The government on Friday will issue the employment report for July and economists polled by MarketWatch expect another healthy 220,000 gain in new jobs.
The median forecast of 41 economists surveyed by Bloomberg projected claims would rise to 272,000, with estimates ranging from 262,000 to 280,000.
The U.S. Department of Labor released its weekly jobless claims as being 270,000 in the prior week.
While labor markets have strengthened bringing the unemployment rate to within the Fed’s target range, lack of wage growth has kept inflation well below the Fed’s desired rate.
It’s the 22nd week in a row claims have held below 300,000, considered a benchmark for an improving labor market.
“While the unemployment rate, at 5.3%, is well below its average levels of the past 50 years, neither workers nor businesses seem particularly optimistic about growth prospects”.
Thursday’s jobless claims report showed that there were 2.3 million people total receiving unemployment benefits, which are available up to 26 weeks after separation, through mid-July.
Throughout the year, falling unemployment has been one of the bright spots in the U.S. economy.
The Federal Reserve assessed the job market as “solid” just last week, according to the Fiscal Times. The U.S. dollar was little changed against a basket of currencies.
Employers in the technology sector, including Microsoft (MSFT.O), Qualcomm (QCOM.O) and Intel Corp (INTC.OQ), announced 18,891 job cuts in July.