New applications for unemployment benefits fell slightly in the week that ended Saturday, the Department of Labor reported Thursday, to 261,000 from a very low 262,000 the week before.
That number of jobless claims was better than the predictions of private-sector economists, who expected a slight rise to about 265,000 new applications, and a sign that the jobs recovery still has room to run.
Investors and policymakers, especially at the Federal Reserve, closely watch jobless claims numbers because they are a frequently-updated — weekly — indication of the health of the labor market and the economy. Fewer claims suggest fewer layoffs, and accordingly greater job growth.
Fed officials, who will meet this week and weekend in Jackson Hole, Wyoming to discuss monetary policy, will see the jobless claims numbers as one of the biggest signs available that the labor market is still improving and that the economy is strong enough to justify rate hikes.
Average new claims, at 264,000 over the past month, are running well below the 300,000 level that economists think would be a sign that unemployment was going to rise. In fact, jobless claims haven’t hit the 300,000 mark in 77 weeks, the longest such streak since 1970, when the U.S. population and workforce was much smaller.
