Jobless claims fall to eight-year low

WASHINGTON — Fewer Americans filed applications for unemployment benefits last week, sending the average over the past month to an eight-year low, a sign the labor market continues to gain momentum.

Jobless claims decreased by 14,000 to 289,000 in the week ended Aug. 2 from 303,000 in the prior period, a Labor Department report showed Thursday in Washington. The median forecast of 47 economists surveyed by Bloomberg called for an increase to 304,000.

Companies are holding on to more workers in an effort to keep up with increased orders and stronger consumer demand, contributing to a virtuous cycle of growth as the economy accelerates. Fewer layoffs and more jobs would support further gains in incomes and household spending, which accounts for 70 percent of the economy.

“Demand for labor is continuing to improve — we see that in virtually every report,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “The current level of layoffs is very low and consistent with a pretty healthy job market.”

Estimates in the Bloomberg survey ranged from 290,000 to 315,000. The prior week’s claims were revised from an initial reading of 302,000.

The four-week average, a less-volatile measure than the weekly figure, dropped to 293,500, the lowest since February 2006, from 297,500 the week before.

No states were estimated last week and there was nothing unusual in the data, a Labor Department spokesman said as the figures were released to the press. The impact of the seasonal swings from auto-plant shutdowns that occur in July is typically over by now, the spokesman said.

The number of people continuing to receive jobless benefits declined by 24,000 to 2.52 million in the week ended July 26.

In that same period, the unemployment rate among people eligible for benefits held at 1.9 percent, the report showed.

Initial jobless claims reflect weekly firings and typically decrease before job growth can accelerate. While the timing and extent of closings to re-tool auto factories for the new model year can cause claims to swing this time of year, claims have remained low by historical standards in recent months as job growth accelerates.

U.S. employers added more than 200,000 workers to payrolls in July for a sixth straight month, the first time that’s happened since 1997. Employment climbed by 209,000 after a 298,000 gain in June, while the jobless rate rose to 6.2 percent as more Americans entered the labor force seeking work.

Even so, companies such as Amgen Inc. are still reducing headcount to lower costs or refocus their business.

The world’s biggest biotechnology company by sales will cut up to 2,900 employees, or 15 percent of its workforce, and close facilities in Washington State and Colorado, according to a statement last week. The move is part of a restructuring plan that focuses on drugs approaching market approval.

Last month Microsoft Corp. said it will eliminate as many as 18,000 jobs, the largest round of cuts in its history. The restructuring, which amounts to about 14 percent of its workforce and includes 12,500 factory and professional positions, is expected to be fully completed by June 2015.

Federal Reserve policy makers are monitoring the labor market’s progress as they wind down their stimulus program. The central bank has said there is still room for improvement, and “a range of labor-market indicators suggests that there remains significant underutilization of labor resources,” according to a statement last week from the Federal Open Market Committee.

More in Herald Business Journal

Tulalips break ground on new Quil Ceda Creek Casino Hotel

A 150-room hotel was added to what is now a $140 million complex expected to open in spring 2019.

For modern women, 98-year-old rejection letters still sting

In a stark new video, female Boeing engineers break the silence about past inopportunity.

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Providence Hospital in Everett at sunset Monday night. Officials Providence St. Joseph Health Ascension Health reportedly are discussing a merger that would create a chain of hospitals, including Providence Regional Medical Center Everett, plus clinics and medical care centers in 26 states spanning both coasts. (Kevin Clark / The Daily Herald)
Merger would make Providence part of health care behemoth

Providence St. Joseph Health and Ascension Health are said to be talking. Swedish would also be affected.

Boeing raises dividend 20%, continues stock buyback program

The manufacturer said it has repurchased $9.2 billion worth of its shares this year.

Trudeau snubs Boeing, unveils plan to buy used Aussie jets

Trudeau will be assessing the impact fighter jet contracts have on his country’s economy.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Hospital companies merge as insurers encroach on their turf

An anticipated deal between Providence St. Joseph Health and Ascension is only the latest.

Ex-Facebook VP: Social media is destroying society

“In the back, deep, deep recesses of our minds, we kind of knew something bad could happen.”

Most Read