US initial jobless claims fall to 17-month low

Manufacturing recovery bolsters US job market leading to a drop in jobless claims

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First-time US claims for unemployment insurance dipped to their lowest levels in 17 months last week, according to the latest data from the Labour Department.

Weekly jobless figures

Initial jobless claims fell by 14,000 from the week before to a seasonally-adjusted 340,000 for the week ended 28 August. Analysts polled by both Reuters and Dow Jones had predicted filings in the region of 345,000. 

While investors, workers and politicians may cheer the fall of first-time claims to their lowest since 14 March 2020, the metric has some distance to go before it falls below that week’s reading of 256,000. 

The largest increases in initial claims for the week ended 21 August were witnessed in Illinois, Florida and Maryland. 

The number of Americans continuing to receive unemployment benefits after an initial week of support likewise fell to its lowest since mid-March last year, falling by 160,000 to 2,748,000 in the week ended 21 August. 

Manufacturing bolsters US job market

Confidence in manufacturing has contributed to the ongoing recovery in the US jobs market this summer. Manufacturing production witnessed its largest increase in four months in July, rising by 1.4%. Overall industrial production rose by 0.9%, its best gain in four months. 

The weekly statistics will buoy investor sentiment before Friday’s hotly-anticipated monthly jobs report. Analysts have predicted that the US unemployment rate will fall from 5.4% to 5.2%, with the US economy adding 720,000 new jobs. 

By mid-morning (EDT), the dollar traded down by 0.4% against sterling and by 0.17% against the euro. Spot gold hovered flat at $1,809, while the Nasdaq, Dow Jones and S&P 500 all traded 0.4% higher. 

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