WASHINGTON – U.S. initial jobless claims fell for the second straight week last week to their lowest level in 15 months, the government said on Wednesday in a report suggesting a slower pace of layoffs while the economy is slowly recovering.
New claims for unemployment insurance -- a rough guide to the pace of job cuts -- dropped by 11,000 in the week ended June 29 to 382,000, down from a revised 393,000 in the prior week and the lowest since 380,000 in the week ending March 24, 2001, the Labor Department said.
The number of initial claims fell more steeply than Wall Street expectations for a drop to 387,000 from the original Labor Department measure of 388,000 in the June 22 week.
Over the past four weeks, new claims have averaged 392,000. That level was down for the tenth consecutive week from 392,250 in the previous week, and the lowest since 390,750 in the week ending March 2, 2002.
Economists keep a closer watch on the four-week moving average because it is considered a more reliable indicator of the job market's health.
While the weekly jobless claims number gives a more current look at labor market conditions, Friday's comprehensive payrolls report will garner closer attention from the Federal Reserve as it weighs its next move on interest rates.
Most economists expect policymakers at the U.S. central bank will leave interest rates unchanged at four-decade lows until deep in the autumn amid questions about the strength of the economic recovery.
On July 5, the Labor Department will release its employment report for June, which will give a broad look at labor market conditions throughout the economy.
The unemployment rate for June is expected to edge up to 5.9 percent from 5.8 percent in May while the economy was expected to have created 86,000 jobs outside the farm sector. In May, nonfarm payrolls rose 41,000.
The number of corporate layoffs in the pipeline, seen as another key barometer of labor conditions, rose in June, the employment outplacement tracking firm Challenger, Gray and Christmas said on Tuesday.
Until there is a sustained rise in payrolls and the unemployment rate starts to turn lower, economists believe there is little chance the Fed will start raising rates.
In a sign people are still struggling to find work, Labor the number of so-called "continued claims" those drawing more than a week of benefits rose to 3.7 million in the week ended June 22 -- the latest week for which figures are available -- 12,000 more than the previous week.