The Labor Department has some good news today on the heels of its bleak June jobs report: The number of Americans filing first-time claims for unemployment benefits dropped last week by 22,000 to 405,000--the lowest level since mid-April. What's particularly encouraging is that this all happened in July, when jobless claims usually increase "as many U.S. manufacturers shutter plants to retool them for new products such as the latest auto models," according to MarketWatch. Bloomberg, which notes that "a sustained reduction in firings is a first step toward a pickup in hiring," adds that the auto industry in particular suffered fewer layoffs than it typically does this time of year, which an economist quoted in the article chalks up to car factories experiencing their "normal seasonal downturn" in May when they couldn't get parts because of the Japanese earthquake and tsunami. The drop in jobless claims would have been even steeper had Minnesota's government not shut down over a budget debate, the Labor Department tells us.
Still, as is always the case in the roller coaster ride that is economic news, the outlook isn't entirely sunny. The AP points out that "even with last week's decline, applications have now topped 400,000 for 14 weeks, evidence that the job market has weakened since earlier this year." Why is the 400,000 number so important? "When the U.S. economy creates lots of new jobs, new applications for unemployment benefits usually drop well below 400,000 for a prolonged period," MarketWatch explains. Bloomberg adds that U.S. retail sales were listless in June, increasing by only 0.1 percent in, when you exclude auto sales, the weakest performance since July 2010.