First-time jobless claims drop by 7,000, though continued claims remain high

July 27 (UPI) -- With the Federal Reserve hoping to "achieve maximum employment" in the U.S. economy, first-time claims of unemployment dropped by 7,000 relative to week-ago levels, data published Thursday show.

The Labor Department reported initial claims dropped to 221,000 during the seven-day period ending July 22. The less-volatile, four-week moving average was also revised lower by 3,750 to 237,500.

For those seeking support over continued weeks, however, levels jumped by 165,181 to reach 1.9 million during the week ending July 8. That's roughly 437,000 higher than during the same period in 2022.

By state, Georgia had the largest gains, with 4,879, while Michigan saw a decline of 3,620 in initial jobless claims.

The decline in first-time claims nationally follows a series of upbeat reports on the U.S. economy. Consumer confidence is on the rise, despite lingering inflationary pressures, and the latest reading on gross domestic products showed a better-than-expected performance, suggesting the world's leading economy will avoid a recession this year.

On Wednesday, however, the Federal Reserve erred on the side of caution by announcing a rate hike of 25 basis points, leaving the range for federal funds rate at a 22-year high of between 5.25% and 5.5%.

In a statement following the announcement, the Fed said it "seeks to achieve maximum employment and inflation at the rate of 2% over the longer run."

The Brookings Institution describes "maximum employment" as the highest level of employment that a given economy can sustain without creating higher inflation. More jobs mean more cash, which incentivizes demand and drives prices higher.

That latest reading on GDP including data on discretionary personal income, which came in sharply lower than first quarter levels, suggesting Fed targets may be within reach.