U.S. initial jobless claims decline by 29,000

Initial jobless claims in the U.S. fell to the lowest level in two years last week, the Department of Laboursaid Thursday.

The number of Americans filing initial claims for jobless benefits in state programs hit 429,000 for the week ending July 10, a decrease of 29,000 from the previous week.

That's well under the 445,000 that economists were anticipating.

The four-week moving average was 455,250, a decrease of 11,750 from the previous week's level. Economists pay closer attention to the four-week figure because it smooths out fluctuations.

Initial claims are now at their lowest level since August 2008,before the global economic slowdown began. They're also 20 per cent below where they were during the same week last year.

Although an encouraging sign for a U.S. economy struggling to gain traction, economists are looking for claims to drop below 400,000 and stay there before thinking a large number of new jobs are being created.

Much of the weekly drop was a result of seasonal factors, as General Motors and other manufacturers skipped their usual summer shutdowns that customarily inflate claims this time of year.