Initial jobless claims lowest since January

The number of newly laid-off workers filing initial claims for jobless benefits last week fell to lowest level since early January, largely due to changes in the timing of auto industry layoffs.

Continuing claims, meanwhile, unexpectedly jumped to a record high. While layoffs are slowing, jobs remain scarce and the unemployment rate is rising. The unemployment rate rose to 9.5 percent last month and is expected to top 10 percent by the end of this year.

New claims for unemployment insurance plummeted by 52,000 to a seasonally adjusted 565,000, the Labor Department said. That's significantly below analysts' expectations of 605,000 for the week ending July 4.

The last time new claims were below 600,000 was week of Jan. 24.

The four-week average of initial claims, which smooths out fluctuations, fell to 606,000, down more than 50,000 from its peak in early April. Still, claims remain elevated: they were at 367,000 a year ago.

Wholesale inventories dipped 0.8 percent in May, slightly smaller than the 1 percent decline economists expected, the Commerce Department said. Sales at the wholesale level rose 0.2 percent, better than the expected flat reading.