The number of Americans filing for unemployment benefits fell more than expected last week, reinforcing views of labor market strength that could encourage the Federal Reserve to raise interest rates soon. The index for current manufacturing activity in the region rose 5 points to only 2.0 in August, as the share of firms reporting an increase in activity (35 percent) barely exceeded the share reporting a decrease (33 percent). This is only the third positive reading of the index in the current year. Another report on Thursday showed a mild improvement in manufacturing activity in the mid-Atlantic region this month amid rising shipments from factories. But weak orders and shrinking employment suggested the manufacturing malaise was far from over.
Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 262,000 for the week ended Aug. 13, the Labor Department said. Economists had forecast initial claims slipping to 265,000 in the latest week. Claims have now been below 300,000, a threshold associated with a strong labor market, for 76 straight weeks. That is the longest such stretch since 1973, when the labor market was much smaller. It is now viewed as either at or near full employment.
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