US Jobless Claims Drop to Six Year Low

The number of Americans filing new claims for jobless benefits fell last week to a near six-year low, bolstering the case for the Federal Reserve to wind down an economic stimulus program.

Another economic report on Thursday confirmed a solid pace of economic growth in the second quarter, although it also showed a worrisome decline in consumer prices.

Initial claims for state unemployment benefits dropped 5,000 last week to a seasonally adjusted 305,000, the Labor Department said.

That points to a labor market that is continuing to heal from the 2007-09 recession despite this year’s harsh government austerity and mounting concerns that political dysfunction could trigger a sovereign debt crisis.

The drop in claims could bode well for employers adding workers to their payrolls and sooth concerns at the Federal Reserve, which last week said it was postponing a plan to reduce monthly bond purchases aimed at keeping interest rates low to support the labor market.

via Reuters

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