The number of Americans filing for first-time unemployment benefits rose unexpectedly last week, but remained below 300,000 for the twelfth consecutive week, as the underlying trend continued to suggest a strengthening labour market.
Jobless claims increased by 8,000 to a seasonally adjusted 282,000 in the week ending May 23, the Labor Department reported on Thursday. The previous week’s rate was revised up by 1,000 to 274,000. The median estimate of economists called for a decline to 270,000 last week.
The four-week average for jobless claims – a less volatile measure of layoffs in the labour market – rose by 5,000 to 271,500.
Weekly jobless claims provide a consistent summary of the number of workers making first-time claims for unemployment benefits. A drop in jobless claims is usually associated with stronger hiring trends, indicating employers are retaining workers to meet ongoing demand. The 300,000 mark is a critical threshold for weekly claims and is generally associated with a tightening labour market. Last week marked the twelfth consecutive week jobless claims were below that key threshold.
The number of Americans continuing to receive jobless benefits in the week ending May 16 increased by 11,000 to 2.222 million. The four-week average for continuing claims was slightly more than 2.221 million.
The four-week average for jobless claims suggests that US employers continued to add more than 200,000 workers in May following a solid rebound in April. Employers added 223,000 nonfarm payrolls last month after hiring slowed to just 85,000 in March. The unemployment rate dropped in May to a nearly seven-year low of 5.4 percent.
The Federal Reserve’s latest forecast, released in March, suggest that the unemployment rate could fall to 5 percent to 5.2 percent by the end of the year. The Fed will released updated projections at the next Federal Open Market Committee policy meetings scheduled for June 16-17.