The number of Americans filing new applications for unemployment benefits last week fell to its lowest level in more than 41-1/2 years, suggesting job growth remained solid despite slowing in June.
Initial claims for state unemployment benefits declined 26,000 to a seasonally adjusted 255,000 for the week ended July 18, the lowest level since November 1973.
However, last week's drop likely exaggerates the strength of the labor market as claims are volatile during summer when automakers usually shut assembly plants for annual retooling.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell only 4,000 to 278,500 last week.So, what's the story?
Remember the two words: "seasonally adjusted."
Historically automakers shut assembly plants for annual retooling. Haven't seen many stories of automobile manufacturers shutting down. So, if automobile shut-downs are in the complicated formula to determine the "seasonally adjusted" number, and the shut-downs did not occur....