US Weekly Claims Unexpectedly Fall

The number of Americans applying for unemployment benefits unexpectedly fell last week, pointing to a tightening labor market.

Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 267,000 for the week ended May 28, the Labor Department said on Thursday. Claims for the prior week were unrevised.

Economists polled by Reuters had forecast initial claims rising to 270,000 in the latest week. Claims have now been below 300,000, a threshold associated with a strong job market, for 65 straight weeks, the longest streak since 1973.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,750 to 276,750 last week.

A Labor Department analyst said there were no special factors influencing last week’s claims data. However, claims for Tennessee, Virginia, Wyoming, Puerto Rico and Hawaii were estimated because of the Memorial Day holiday.

Last week’s claims report has no impact on the employment report for May, which is scheduled to be published on Friday, as it falls outside the survey period.

Applications for jobless benefits rose in May compared to April, with economists blaming the different timing of school spring breaks as well as a month-long strike by Verizon (VZ.N) workers.

That strike, which has since ended, is expected to reduce May nonfarm payrolls by 35,100 jobs, according to a government report last week.

Economists polled by Reuters are forecasting payrolls increasing by 162,000 in May after rising by 160,000 in April. The unemployment rate is forecast slipping to 4.9 percent from 5.0 percent in April.

Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid increased 12,000 to 2.17 million in the week ended May 21. The four-week average of the so-called continuing claims also rose 12,000 to 2.16 million.

Reuters

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell