Initial claims for state unemployment benefits declined 26,000 to a seasonally adjusted 255,000 for the week ended July 18, the lowest level since November 1973, the Labor Department said on Thursday. Claims for the prior week were unrevized.
However, last week’s drop likely exaggerates the strength of the labor market as claims are volatile during summer when automakers usually shut assembly plants for annual retooling.
Some firms keep production lines running, which throws off a model the government uses to smooth the data for seasonal variations. A Labor Department analyst said there were no special factors influencing the data and that only claims for Puerto Rico had been estimated.