New claims for unemployment
benefits hit a six-year low last week indicating that the job market may be
picking up. The Department of Labor reported initial claims for benefits fell
by 15,000 to a seasonally-adjusted 320,000, the lowest level since October
2007.
With this week’s data, the
four-week moving average for new claims fell by 4,000 to 332,000. This
four-week average smoothes out week-to-week volatility and is at its lowest
level since November 2007.
The drop in both new applications
and the four-week average may indicate an overall improvement in the labor
market after hiring had slowed slightly in July. The job market is being monitored closely
since the Fed has indicated that it will use unemployment data as its barometer
for ending the bond-purchase program. Previous statements by the Fed indicate
it will cease its $85 billion monthly bond purchases when unemployment hits 7.0
percent. When the scaling back of that program starts is dependent on the
employment data, and the Fed has indicated that it will start tapering this
year.
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the full report from the Department of Labor.