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US claims tumble below 300K; 4-week average hits lowest since 2006

Barry Cicero, left, with the American Legion discusses oportunities for veterans with U.S. Army veteran Risa Stegall at the Hiring Our Heroes job fair for veterans at the University of Chicago on July 30, 2014 in Chicago.
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Barry Cicero, left, with the American Legion discusses oportunities for veterans with U.S. Army veteran Risa Stegall at the Hiring Our Heroes job fair for veterans at the University of Chicago on July 30, 2014 in Chicago.

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to a further strengthening of labor market conditions.

Initial claims for state unemployment benefits decreased by 14,000 to a seasonally adjusted 289,000 for the week ended Aug. 2, the Labor Department said on Thursday.

The prior week's claims were revised to show 1,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims rising to 305,000 for the week ended Aug. 2. Volatility related to the summer automobile plant shutdowns for retooling pushed claims to a 14-year low in July.

Most of that volatility has worked its way through the data. The four-week average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,000 to 293,500, the lowest level since February 2006.

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

The slow pace of layoffs and steady hiring are helping to strengthen labor market conditions, fanning speculation of an early interest rate increase from the Federal Reserve.

The jobless claims report showed the number of people still receiving benefits after an initial week of aid dropped by 24,000 to 2.52 million in the week ended July 26.

The unemployment rate for people receiving jobless benefits was 1.9 percent for the fourth week in a row.

—By Reuters

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