Weekly Jobless Claims Fall, but So Does G.D.P.
Thursday's weekly report of first-time unemployment claims brought some unexpectedly good news, as the number of those seeking the benefit fell dramatically from the previous week, but the GDP also fell.
Thursday's weekly report of first-time unemployment claims brought some unexpectedly good news, as the number of those filing for benefits fell from the previous week, but the gross domestic product also fell. The Department of Labor reported that 359,000 people had sought the benefits, down 26,000 from last week's revised figure of 385,000. It's good news because it puts the number a two-month low, but it's also a surprise for economists. Those surveyed by the Associated Press had predicted this week's level to drop only slightly, to 377,000, while Marketwatch had predicted the number at 375,000. The four-week moving average, which is a more stable number fell to 374,000 from 378,500.
However, the news is not all good. Despite the strong unemployment claims report, the second-quarter G.D.P. estimate was revised down to 1.3 percent from 1.7 percent, with the government "citing less consumer spending and business investment than previously estimated," according to Marketwatch. The AP also throws this dash of cold water on any optimism:
Growth isn't likely to get much better for the rest of this year. Economists expect it to grow at a roughly 2 percent pace. That's typically too weak to create enough jobs to lower the unemployment rate.