The number of U.S. workers filing new claims for unemployment benefits fell last week by more than economists expected, bucking the typical July trend as fewer factories were shuttered for the summer.
Separately, falling food and energy costs pushed down U.S. producer prices for a third straight month in June, while core prices remained tame. Price pressures deeper in the production pipeline posted big declines, as well. Meanwhile, U.S. industries boosted production in June but only slightly and manufacturing posted a decline, a sign the sector that has led the economic recovery is cooling.
In its weekly report Thursday, the Labor Department said the number of U.S. workers filing initial claims for jobless benefits decreased by 29,000 to 429,000 in the week ended July 10. That is the lowest level for claims since August 23, 2008 -- just as the financial crisis was nearing its height.
Economists surveyed by Dow Jones Newswires had expected claims would fall by 9,000.
The previous week's level was revised slightly upward, from 454,000 to 458,000. But the four-week moving average -- which aims to give a better idea of the trend by smoothing volatility in the data -- fell by 11,750 to 455,250 in the week ended July 10. The prior week's average was revised to 467,000.
Claims lasting more than one week, meanwhile, jumped in the week ended July 3 to reverse declines posted in the prior week.
Although claims in July typically tend to rise as factories shut down for part of the summer, analysts widely expected to see big declines in the July 10 data after General Motors Co. announced plans to keep most of its plants open for the season.
A Labor Department economist said Thursday, however, that GM is not the only driving force behind the large decline.
"This was not just a GM thing," he said. "We saw this across a number of different states." He added that more data on this will be available next week.
But whether or not this improvement in the figures will last remains to be seen.
Other economic indicators are starting to point to a possible slowdown in U.S. growth, driven largely by the high 9.5% unemployment rate. The lack of available jobs has led to a decline in consumer spending for the past two months, with retail sales down 0.5% in June. The U.S. economy also shed 125,000 nonfarm payrolls in June as temporary Census workers lost their jobs and the private sector only added an additional 83,000 jobs.
In the Labor Department's report Thursday, the number of continuing claims -- those drawn by workers for more than one week in the week ended July 3 -- rose by 247,000 to 4,681,000 from the preceding week's revised level of 4,434,000.
The unemployment rate for workers with unemployment insurance for the week ended July 3 was 3.7%, a 0.2 percentage point increase from the prior week's revised rate of 3.5%.
The largest decrease in claims for the week ended July 3 occurred in Florida, which saw claims fall by 3,586. Other states with decreases included Georgia, Connecticut, Pennsylvania and Iowa.
The largest increase in claims occurred in New York, which saw claims rise by 8,066 in the week ended July 3 due to layoffs in the service and transportation industries. Other states with increases included New Jersey, Michigan, Illinois and Ohio.