Fewer Americans filed for unemployment benefits in the week ending August 6, beating expectations and bringing numbers down to a four-month low.
The U.S. Department of Labor released a report today indicating that applications for jobless benefits last week decreased by 7,000 down to 395,000, the fewest since early April. Economists had forecast 405,000 claims.
Analysts claim that U.S. companies have reduced lay-offs, but also have been reluctant to increase hiring, which continues to weigh on consumer spending. Weaker growth, the U.S. credit rating downgrade and overall uncertainty over the U.S. government budget deficit cuts may prompt businesses to further delay hiring plans, posing a threat to the recovery.
“Initial claims have provided some hopeful signs that the labor market is healing,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. In West Chester, Pennsylvania, said before the report. “The improvement in initial claims may pause as the labor market suffers a hangover following the U.S. debt- ceiling debate and tightening in financial market conditions.”
Dollar gained strength after the data. USDJPY jumped to 76.86 from the pre-news level of 76.51. USDCHF surged to 0.7523 from pre-news 0.7402.