First-time claims for U.S. unemployment benefits fell by much more than expected in the week ended July 21st, according to a report released by the Labor Department on Thursday, with claims pulling back near the four-year low set earlier this month.
The Labor Department said initial jobless claims tumbled to 353,000 from the previous week's revised figure of 388,000. Economists had expected jobless claims to edge down to 380,000 from the 386,000 originally reported for the previous week.
With the steep drop, jobless claims pulled back near the 352,000 level seen in the week ended July 7th, which was the lowest since April of 2008.
The volatility seen in recent weeks reflects seasonal distortions caused by fewer auto plant shutdowns than normal during this time of year.
Robert Kavcic, an economist with BMO Capital Markets, noted, "Ford cut its shutdown to one week from its typical two weeks, and Chrysler will skip shutdowns altogether at most of its U.S. plants."
The report also showed that the less volatile four-week moving average dipped to 367,250 from the previous week's revised average of 376,000.
Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also fell to 3.287 million in the week ended July 14th from the preceding week's revised level of 3.317 million.
The four-week moving average of continuing claims edged down to 3,309,000 from the preceding week's revised average of 3,312,750.
Peter Boockvar, managing director at Miller Tabak, said, "With the data clouded, the Fed is going to have to rely on other measures of the labor market when they decide next week whether to ease again or wait until September."
Following next Wednesday's Federal Reserve meeting, the Labor Department is scheduled to release its closely watched monthly job report next Friday.
A Labor Department report released earlier this month showed that U.S. employment rose by 80,000 jobs in June compared to economist estimates for an increase of about 100,000 jobs.
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