US weekly jobless claims drop to five-month low

The number of Americans filing applications for unemployment benefits fell to a five-month low last week, suggesting the labor market remains strong despite slowing job growth.

Initial claims for state unemployment benefits declined 15,000 to a seasonally adjusted 204,000 for the week ended Sept. 7, the lowest level since April, the Labor Department said on Thursday. The drop in claims was the largest since May.

Data for the prior week was revised to show 2,000 more applications received than previously reported. Economists polled by Reuters had forecast claims slipping to 215,00 in the latest week.

The claims data covered the Labor Day holiday. Claims tend to be volatile around public holidays and the sharp drop last week could be exaggerating labor market strength. The Labor Department said no states were estimated last week.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,250 to 212,500 last week.

Layoffs remain low despite a year-long trade war between the United States and China, which is hurting business investment and manufacturing and threatening to derail the longest economic expansion in history.

But job growth is slowing and economists worry that could take some edge off robust consumer spending, which is mainly driving the economy, now in its 11th year of expansion.

Nonfarm payrolls increased by 130,000 jobs in August, down from 159,000 in July, the government reported last Friday. Job growth has averaged 158,000 per month this year, still above the roughly 100,000 per month needed to keep up with growth in the working age population.

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid decreased 4,000 to 1.67 million for the week ended Aug. 31. The four-week moving average of the so-called continuing claims dropped 14,500 to 1.68 million.