The number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 8-1/2 years last week, suggesting the labor market recovery was gaining traction. Initial claims for state unemployment benefits declined 19,000 to a seasonally adjusted 284,000 for the week ended July 19, the Labor Department said on Thursday. That was the lowest level since February 2006, and confounded economists' expectations for a rise to 308,000. The four-week average of claims, considered a better gauge of labor market trends as it irons out week-to-week volatility, fell 7,250 to 302,000, the lowest level since May 2007. Employment has grown by more than 200,000 jobs in each of the last five months, a stretch not seen since the late 1990s. Federal Reserve chief Janet Yellen cautioned last week that the Fed could raise interest rates sooner and more rapidly than currently envisioned if the labor market continued to improve faster than anticipated by policymakers.
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