Jobless Claims Plunge to Six-Month Low
THE number of Americans filing new unemployment claims last week tumbled to the lowest level in six months, as auto and textile workers returned to work from temporary layoffs, the Labor Department said yesterday.
The department says first-time filings for state jobless benefits fell 51,000 to 321,000 in the week that ended July 29, the largest drop in a year. The decline brought claims to their lowest level since 319,000 the week of Feb. 4.
The drop was far larger than economists anticipated.
''It's good news,'' says James Glassman of Chemical Securities. ''However you look at it, it looks like employment has stopped contracting and may be expanding.''
The inflation-sensitive 30-year Treasury bond skidded more than a full point on the news, and its yield climbed to 6.94 percent from 6.86 percent late Wednesday, as investors viewed the jobless report as a sign of economic strength.
The number of people receiving state unemployment benefits in the week that ended July 22 tumbled to 2.66 million from a revised 2.78 million the previous week.
Mr. Glassman describes the decline as substantial and says it is another sign of labor-sector health. But some analysts say any week's number was difficult to judge and was of only limited use as an economic indicator.
Eighteen states and Puerto Rico reported declines in initial claims exceeding 1,000 the week of July 22. Michigan, Kentucky, New York, South Carolina, and North Carolina reported the largest drops.
Fewer layoffs were reported in auto and textile industries, which often shut down plants temporarily during the summer. Ohio, Indiana, Kansas, and Delaware reported layoff increases of more than 1,000.