According to a report from Bloomberg, over the past month, the number of Americans filing for unemployment benefits has declined, reaching an all-time low in eight years. This trend may indicate that the job market is picking up speed as demand is increasing. This could in turn increase wages and catalyze consumer spending.
A report from Bloomberg states, “The four-week average jobless claims (INJCJC), considered a less volatile measure than the weekly figure, dropped to 297,250, the lowest since April 2006, from 300,750 the prior week.”
“Employment growth remains healthy,” and the reading is “consistent with a strong labor market,” said David Sloan, senior economist at 4Cast Inc., according to Bloomberg.
Some point to the auto industry as contributing to these results as automobile manufactures usually close production during July to revamp for newer models and cars, but this year there were fewer closings due to the growing demand for cars.
“Claims are often volatile in the summer because of the timing of shutdowns at auto plants for retooling, but even so the downward trend in claims is evident and very positive for the labor market and the overall economy,” said Stuart Hoffman, chief economist at PNC Financial Services Group, according to The Wall Street Journal. “The current level of claims is consistent with monthly job growth of above 200,000, and the July employment report should be another strong one.”
It remains to be seen if the economy will have a steady improvement or if this decrease in unemployment benefit applications simply reflects of the seasonal factors that create natural, expected fluxes.
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