The number of Americans filing first-time claims for unemployment benefits fell by 15,000 last week, an unexpectedly large decline that provided further evidence of the economy's strength.
The Labor Department said new applications for unemployment benefits totaled 316,000 last week, pushing the claims level to its lowest point since early August.Many analysts had been expecting only a modest decline in jobless filings of around 2,000. Claims had risen by 5,000 in each of the two previous weeks.
On Friday, the government will release its closely watched unemployment report for August. Many analysts expect the jobless rate will decline to 5.3 percent, down from a level of 5.4 percent in July, and for payroll jobs to grow by around 230,000 for the month.
If payroll growth is significantly higher than that figure, economists said it would greatly increase the prospect that Federal Reserve policymakers will raise interest rates when they next meet on Sept. 24 in an effort to dampen economic growth and keep inflationary pressures at bay.
The strength in the nation's labor markets has been spotlighted by President Clinton as evidence that his economic policies are working and he deserves a second term.
GOP rival Bob Dole, however, has contended that even with low unemployment, incomes have been stagnant and Americans deserve a $548 billion tax break.
The 15,000 decrease in jobless filings represented the first drop in five weeks. Because of those previous gains, the four-week moving average for claims edged up slightly to 323,500, compared with 323,000 the week before. It was the highest level for the four-week average since the week ending Aug. 3.
During the week ending Aug. 24, 27 states and territories reported an increase in jobless claims and 26 reported declines. The state data is reported a week later than the national data.
The state with the largest increase in claims was Tennessee, a gain of 1,061 that state officials attributed to new layoffs in food, textile, glass and electronic equipment industries.
The states with the biggest declines were California, down 1,627; Delaware, down 1,564; Michigan, down 1,350, and Ohio, down 1,006.