US jobless claims dive to lowest since April

New claims for US unemployment benefits fell sharply last week, hitting their lowest level in nearly four months, official data showed Thursday. Initial jobless claims totaled a seasonally adjusted 398,000 in the week ending July 23, the Labor Department said in a report offering some hope of stabilization in the troubled job market. It was the first time claims had fallen below the threshold of 400,000 since the week ending April 2. Claims fell by 24,000 from the prior week's upwardly revised 422,000, and were much better than the average analyst forecast of 415,000 claims. The drop drove the four-week moving average lower to 413,750. "Claims dropped to their lowest since early April, though this is not necessarily a sign that the labor market is back on the right track," said Andrew Gledhill at Moody's Analytics. Gledhill pointed to "notorious" volatility in July numbers, with seasonal factors such as short-term plant shutdowns, particularly in the auto industry. "However, should initial claims hold below 400,000 in August and beyond, this would be a positive signal that the labor (market) is turning around after several months of subpar performance." A sluggish US economy has left employers reluctant to hire and the unemployment rate rose to 9.2 percent in June. The Labor Department noted that for the first time this month the weekly number had not been impacted by claims from Minnesota employees affected by a state government shutdown.