Fewer Americans filed for unemployment claims last week, suggesting a possible rebound in the labor market following a weak job data in May.
Jobless claims dropped 18,000 to 259,000 for the week ended June 18, according to the Labor Department report on Thursday. The drop represents the largest since February, near a 43-year low (253,000) recorded in March this year.
Jobless claims have now been below 300,000 threshold for 68 straight weeks, the longest streak since 1973. The four week moving average that iron out week-to-week volatility, fell 2,250 to 267,000 last week.
Sustained low level of jobless claims could give Federal Reserve officials more confidence that the labor market is picking up and that the recent weakness in payroll data will dissipate.
“This data continue to point to a labor market that continues to be pretty solid,” said Ward McCarthy, chief financial economist at Jefferies LLC in New York. “The weekly labor market data right now isn’t really fitting with the monthly labor market data, but I expect that over the next few months we’ll see a return to trend in payrolls”.
Activities in the manufacturing sector rose to a three month high in early June, while new single-family home sales dropped in May from over eight year high recorded in April, the trend remained in line with the seemingly stable housing market.
“Today’s data suggest that growth has bounced back in the second quarter,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania.
Overall, labor market seems more stable now, when compared with May’s non-farm payrolls report.
“The May to June improvement points to a lower pace of firings in June. Our June payrolls forecast is 180,000,” said Ted Wieseman, an economist at Morgan Stanley in New York.