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Filings for new jobless claims in US decline
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The number of Americans filing new claims for jobless benefits fell last week to a near six-year low, bolstering the case for the Federal Reserve to wind down an economic stimulus program.
Another economic report yesterday confirmed a solid pace of economic growth in the second quarter, although it also showed a worrisome decline in consumer prices.
Initial claims for state jobless benefits dropped 5,000 last week to a seasonally adjusted 305,000, the Labor Department said.
That points to a labor market that is continuing to heal from the 2007-09 slump despite this year’s harsh government austerity and rising concerns that political dysfunction could trigger a sovereign debt crisis.
The drop in claims could bode well for employers adding workers to their payrolls and sooth concerns at the Fed, which last week said it was postponing a plan to reduce monthly bond purchases aimed at keeping interest rates low to support the labor market.
“Claims are signaling further acceleration in payrolls gains,” said Jim O’Sullivan, an economist at High Frequency Economics in New York.
The Fed said it held back because of concerns over a still-weak labor market, although Fed Chairman Ben Bernanke said policymakers were also worried about a debate in Congress over fiscal policy.
Congress must raise a limit on government borrowing by mid-October or the nation could begin defaulting on its obligations soon after.
Lawmakers are trying for a deal to keep most government offices from shutting after this month when budgets are due to expire.
In a separate report, the US government said it still estimated that US gross domestic product, a measure of all the goods and services produced in the economy, grew at a 2.5 percent annual rate between April and June.
That is a respectable pace of growth, especially considering that Washington hiked taxes in January and slashed the federal budget in March.
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