Initial jobless claims, a rough way to measure layoffs, declined by 12,000 to 209,000 in the seven days ended Aug. 17, the government said Thursday.
Economists polled by MarketWatch estimated new claims would total a seasonally adjusted 215,000.
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What happened: Raw or unadjusted jobless claims fell sharply in California, erasing a large increase in the prior week likely tied to the usual ebb and flow in the state’s economy. New claims also dropped in Florida and Texas.
The more stable monthly average of new claims, meanwhile, rose by a scant 500 to 214,500.
The four-week average usually gives a more accurate read into labor-market conditions than the more volatile weekly number, but both are near the lowest levels since the late 1960s and early 1970s.
The number of people in the U.S. already collecting unemployment benefits, known as continuing claims, fell by 54,000 to 1.67 million. These claims are near a 40-plus year low.
Big picture: The economy has slowed and the U.S., as it turns out, did not add as many new jobs last year as the government previously reported. That’s the bad news.
Read: U.S. created 500,000 fewer jobs since 2018 than previously reported
The good news is that companies haven’t resorted to widespread layoffs. Steady consumer spending has kept demand high enough to ensure that firms maintain current staff levels.
Businesses also worry that if they let workers go in a tight labor market when good help is extremely hard to find, they’ll have trouble finding replacements if the economy reaccelerates.
What would worry economists is if claims start to ratchet higher, but there’s probably little reason to worry until claims shoot above 230,000 and move toward 250,000.
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Market reaction: The Dow Jones Industrial Average DJIA, +0.51% and the S&P 500 index SPX, +0.42% were set to open modestly higher in Thursday trades. The 10-year Treasury yield TMUBMUSD10Y, +0.80% rose slightly to 1.61%.