Applications for US unemployment aid plummet to 42-year low

Despite the improving headline figures, Fed Chairwoman Janet Yellen told members of Congress last week that she remains concerned about subdued wage growth and the number of Americans sitting on the sidelines of the labor force. The May jobs report, which initially saw 280,000 jobs created, followed an initial claims number during the survey week – 275,000 – that was notably low. And so the trend did not drop as sharply as the weekly print, as Pantheon Macroeconomics’ Ian Shepherdson said in a note to clients, but this rolling average is near its absolute low hit a few months ago. Some automakers may continue to run their assembly lines, which would require additional adjustments in the seasonal employment variation.

There were 10,044 former Federal civilian employees claiming UI benefits for the week ending July 4, an increase of 535 from the previous week.

Fed officials meet next week, but they are not expected to tighten monetary policy before September.

Yet home sales have picked up and Americans are buying more cars. But the record-low level of claims likely won’t influence their decision for when to raise short- term interest rates, which have been near zero since December 2008. The Labor Department reports on the number of people who applied for unemployment benefits during the week ending July 18 on Thursday, July 23, 2015.

Jobless claims for the prior week were unrevised at 281,000. Barclays economists project that employers will have added 250,000 jobs to payrolls next month.

Last month overall U.S. joblessness was at 5.3%, which was a low of seven years.

In a separate report, the Conference Board said its Leading Economic Index rose 0.6 percent last month after advancing 0.8 percent in May.

The important thing, however, is that this data came during the week that the Bureau of Labour Statistics conducts the survey for the monthly jobs report, which we’ll get in just over two weeks on Friday, August 7. The gain was led by improvements in production and employment related indicators.