WASHINGTON – The number of Americans filing new claims for unemployment benefits declined last week, with the four-week average for people receiving benefits dropping to the lowest level in more than four years.
The Labor Department (search) reported that 315,000 newly laid off workers applied for jobless benefits, a decline of 4,000 from the previous week, providing further evidence that solid economic growth is showing up in an improving labor market.
The four-week average for the total number of people receiving benefits dipped to 2.58 million last week, the lowest level for this figure since March 2001, the month the last recession began.
The drop of 4,000 benefit applications last week was slightly better than economists had been forecasting. Since early January, claims levels have remained well below 350,000 at levels that analysts view as signaling a healthy labor market.
That improvement was shown in the total number of people receiving benefits, which dropped to 2.58 million, based on a four-week moving average, down by 312,000 from the level of a year ago.
So far this year, a strong economy has generated an average of 191,000 new jobs per month, better than last year's average of 183,000. Employers created 207,000 jobs in July, which helped to keep the unemployment rate at a low level of 5 percent.
Many analysts believe that the overall economy, which grew at an annual rate of 3.4 percent in the spring, is powering ahead at an even faster pace above 4 percent in the current July-September quarter.
Forecasters believe the labor market will continue to improve as long as soaring energy costs don't jolt business and consumer confidence and cause cutbacks in spending. On Wednesday, the price of crude oil (search) soared to a new all-time closing high of $67.10 per barrel.
So far, surging energy prices have not spilled over into a broadbased rise in inflation. This has allowed the Federal Reserve (search) to continue raising interest rates at a gradual pace to make sure inflation does not get out of control.