US. jobless claims fall, bolster labour market outlook

Thursday 21 August 2014 16.07
Initial claims for US state unemployment benefits declined by 14,000 for the week ended August 16
Initial claims for US state unemployment benefits declined by 14,000 for the week ended August 16

The number of Americans filing new claims for unemployment benefits fell slightly more than expected last week, pointing to a sustained improvement in labour market conditions.

Initial claims for state unemployment benefits declined 14,000 to a seasonally adjusted 298,000 for the week ended August 16, the US Labor Department said. 

Claims for the previous week were revised to show 1,000 more applications received than previously reported. 

Economists polled by Reuters had forecast claims slipping to 300,000 last week. 

A Labor Department analyst said there were no special factors influencing the state level data. 

The four-week average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, rose 4,750 to 300,750. 

But at that level, it remains consistent with solid job growth and claims are back at their pre-recession levels. 

Minutes of the Federal Reserve's July 29-30 policy meeting published last night showed officials viewing the improvement in labour market conditions as "greater than anticipated" and hinted that could lead to an early interest rate increase. 

The Fed had previously described the labour market slack as "significant", but the minutes showed many policymakers thought this characterisation "might have to change before long." 

The Fed has held its benchmark interest rate near zero since December 2008. 

US existing-home sales speed up in July

Meanwhile, sales of existing US homes rose in July to their fastest pace in almost a year amid building momentum in the housing market, the National Association of Realtors said today.

Sales of existing homes, the largest part of the market, rose 2.4% to an annual rate of 5.15 million units in July, the highest rate since last September, NAR said.

But the June sales rate was revised slightly lower to 5.03 million. The July sales pace was the strongest of the year, but still 4.3% below the year-ago level, which was the peak of 2013. 

Lawrence Yun, NAR's chief economist, said that sales momentum was emerging behind stronger job growth and more homes on the market. 

"The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market," he said. 

"More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise," he added. 

The median existing US home price in July was $222,900, up 4.9% from a year ago. July marked the 29th consecutive month of annual price gains.