A report released by the Labor Department on Thursday unexpectedly showed a modest decrease by first-time claims for U.S. unemployment benefits in the week ended July 12th.
The Labor Department said initial jobless claims fell to 221,000, a decrease of 7,000 from the previous week's revised level of 228,000.
Economists had expected jobless claims to rise to 235,000 from the 227,000 originally reported for the previous week.
With the unexpected dip, jobless claims dropped to their lowest level since hitting 216,000 in the week ended April 12th.
However, Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics, said, "We don't read anything into the drop in claims as it was driven by seasonal factors looking for a large rise in claims due to the summer shutdown of auto plants."
"Claims in states with a heavy auto manufacturing presence wound up declining in the latest week," she added.
The report said the less volatile four-week moving average also slipped to 229,500, a decrease of 6,250 from the previous week's revised average of 235,750.
Meanwhile, the Labor Department said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, inched up by 2,000 to 1.956 million in the week ended July 5th.
The four-week moving average of continuing claims also rose by 4,750 to 1,957,500, reaching its highest level since November 2021.
"Continued claims continued their march higher in the week ended July 5, underscoring how unemployed workers are finding it difficult to find new jobs in a labor market where hiring is slow," said Vanden Houten.
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