Jobless claims decline to lowest level in 5 years
Applications for unemployment insurance payments declined by 19,000 to 326,000 in the week ended July 27, the fewest since January 2008, from a revised 345,000 the prior week, the Labor Department reported Thursday in Washington.
Auto plants often shut down in July to retool for the new model year, an activity that causes claims data to become more volatile. Ford idled most of its North American assembly plants for one week this summer instead of two. Three of Chrysler’s assembly plants and all but one of its engine and transmission factories will skip a summer shutdown this year. General Motors hasn’t had a formal summer shutdown since its 2009 bankruptcy.
The number of people continuing to collect jobless benefits dropped by 52,000 to 2.95 million in the week ended July 20. That doesn’t include the number of Americans receiving extended benefits under federal programs.
Forty-five states and territories reported a decline in claims and seven reported an increase, data that is reported with a one-week lag.
Payrolls rose by 195,000 workers in June, indicating the U.S. is poised for faster growth as it shakes off the impact of this year’s tax increases and budget cuts. A Labor Department report tomorrow may show employment rose by another 185,000 last month, according to the median estimate of economists surveyed by Bloomberg. The jobless rate fell to 7.5 percent, matching a four-year low, from 7.6 percent in June, economists projected.
While some companies cut workers, Caterpillar Inc. is requiring employees to take unpaid leave this year as part of a strategy to cut costs amid slowing sales. Those “rolling layoffs” are meant to be temporary, director of investor relations Mike DeWalt said. The company, in Peoria, Illinois, is the largest maker of mining and construction machinery, cut its 2013 earnings forecast this week.
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