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Economic Report: U.S. jobless claims retreat after hitting highest level in eight months

The numbers: Initial jobless claims fell by 5,000 to 256,000 in the week ended July 23, the Labor Department said Thursday.  

Economists polled by The Wall Street Journal had estimated new claims would inch down to 249,000 from last week’s initial estimate of 251,000.

The department revised last week’s level to 261,000. That was the highest level since mid-November.

Key details: The four-week average of claims rose 6,250 to 249,250, the eighth straight weekly gain.

The number of people already collecting jobless benefits fell by 25,000 to 1.36 million.

Big picture: Jobless claims have been creeping higher since hitting a low of 166,000 in March. Fed Chairman Jerome Powell said Wednesday the labor market was strong and a bulwark against recession. “The continued strength of the labor market suggests underlying demand remains solid,” Powell said.

Powell said he saw “the very beginnings of perhaps a slight lessening in the tightness of the labor market, but only be the beginnings.”

Market reaction: U.S. stocks
DJIA,
+1.37%

SPX,
+2.62%

were set to open lower Thursday after the government reported that the economy contracted 0.9% in the second quarter.

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