Initial jobless claims hold steady at 400,000

The number of Americans who applied for unemployment benefits last week held steady at the 400,000 mark, signaling little change in a weak U.S. labor market, government data showed Thursday.

Initial claims for jobless benefits fell 1,000 to a seasonally adjusted 400,000, the Labor Department said. Economists surveyed by MarketWatch had expected new applications to total 400,000 in the week ended July 30.

Initial claims from two weeks ago were revised up to 401,000 from an original reading of 398,000.

The average of new claims in the last four weeks, viewed as a more accurate gauge of employment trends, declined 6,750 to 407,750, the lowest level since mid-April. The monthly average smooths out volatility in the week-to-week data.

The flat level of weekly claims — and continuing decline in the monthly average — could offer a welcome respite after several weeks of mostly negative data showing that the economy is slowing and hiring has slackened.

“If the lower level on initial claims is maintained into August, that would be an encouraging sign that job creation may have improved from the very disappointing pace reported during the second quarter,” said John Ryding of RDQ Economics.

A clearer picture of labor trends will emerge Friday, when the government issues the employment report for July. Economists surveyed by MarketWatch estimate that U.S. nonfarm payrolls added 75,000 jobs last month, but that would be far below the level of hiring needed to drive down the nation’s unemployment rate, which was 9.2% in June.

In normal times, the economy typically adds 200,000 jobs or more each month, with even bigger gains in a strong recovery after a recession. Yet the current recovery has been weak by historical standards and the jobless rate remains elevated.

Bartash writes for MarketWatch.com/McClatchy.