Labor Market Looks Strong as Jobless Claims Rise Less Than Expected

A Missouri veteran, Elliot Timms, donning a “Make America Great Again” hat and brandishing an American flag, has been running 15 miles nearly every day for a year hoping to show everyone how much he loves his country.

The labor market’s strength was once again on display Thursday morning when the Labor Department released weekly jobless claims that came in lower than expected.

Initial claims for state unemployment benefits rose by 1,000 last week to a seasonally adjusted 218,000. Economists had forecast 220,000.

The prior week saw claims drop to 208,000, the lowest reading since December 1969. The Labor Department left that number unchanged in its announcement Thursday.

The less volatile four-week moving average of initial claims fell 3,500 to 214,500 last week.

Fewer people continued to receive unemployment benefits after their initial week of aid, according to the Department of Labor. So-called ongoing claims fell  23,000 to 1.72 million in the week ended July 21. The four-week moving average of ticked down 4,500 to 1.74 million.

The labor market’s strength this year has surprised many economists. Very low unemployment and an aging economic recovery was expected to slowdown job creation. Instead, the economy has created an average of 215,000 jobs a month, well above the 150,000 or so many economists thought would be its natural run rate. Economists think that the economy needs to create around 145,000 jobs to hold unemployment steady with population changes.

Economists expect 190,000 new jobs when the July employment report is released Friday. The unemployment rate is forecast falling one-tenth of a percentage point to 3.9 percent in July.

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