Unemployment benefit claims in the U.S. falls

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, touching the lowest level in two months amid ongoing labor market tightness and defying efforts by the Federal Reserve to slow demand.

The second straight weekly decline in claims reported by the Labor Department on Thursday raised cautious optimism that the economy could avoid a dreaded recession this year.

It followed recent data showing inflation subsiding in June.

Labor market strength is also supporting wage growth, helping consumer spending to continue plodding along.

Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 228,000 for the week ended July 15, the lowest level since mid-May. Economists polled by Reuters had forecast 242,000 claims for the latest week.

Unadjusted claims fell by 326 to 257,976 last week. Claims surged by 5,059 in California and increased by 4,616 in Georgia.

There were also notable rises in filings in South Carolina and Oregon, which were more than offset by significant declines in Michigan, Kentucky, Indiana, New York, New Jersey, Iowa and Illinois.

Reuters/Hauwa Abu