The number of people who applied for new U.S. unemployment-insurance benefits declined by 6,000 to 331,000 in the week that ended Aug. 24, according to a report from the U.S. Department of Labor. Meanwhile, the four-week moving average of initial claims for regular state unemployment-insurance benefits ticked up 750 to 331,250, but remained close to the lowest level since late 2007, near the start of the Great Recession.
Economists surveyed by MarketWatch had expected an initial claims level of 330,000 in the week that ended Aug. 24, compared with an original estimate for the prior week of 336,000. On Thursday the government tweaked the prior week’s claims level to 337,000.
U.S. stock index futures extended gains after the claims report, which was released alongside a revised estimate of GDP growth, while Treasurys fell, sending yields higher. U.S. stocks opened down but were recently up modestly. The S&P was up nearly 4 points.
While initial claims levels are relatively low, hiring is slower than economists would like.
“While a marginal slackening in the pace of layoffs is good news, the labor market situation will not normalize until the other side of the jobs equation, hiring, picks up noticeably,” said Stephen Stanley, an economist at Pierpont Securities.
A job seeker shakes hands with a recruiter during a San Francisco job fair.
Economists are closely watching employment and other data, trying to figure out whether conditions are strong enough for the Federal Reserve to start tapering its massive bond-buying program soon. An announcement could come as early as next month.
Despite steady job growth since 2010, the economy is still down two million jobs from the start of the Great Recession. Recent trends show somewhat slowing hiring. Over the quarter that ended in July, the economy added an average of 175,000 jobs per month, down from an average of 205,000 at the beginning of the year.
Next week the government will report on employment in August, and economists expect growth to remain close to July’s gain of 162,000 jobs.
Also Thursday, the Labor Department reported that continuing claims, which reflect the number of people already receiving benefits, fell 14,000 to 2.99 million in the week that ended Aug. 17. The four-week average of continuing claims, which levels out some weekly volatility, increased 9,500 to 3 million.
Elsewhere Thursday, the U.S. Department of Commerce reported that the U.S. economy grew at a 2.5% annual rate in the second quarter, higher than a prior estimate of 1.7%.