Applications for unemployment benefits fell to 264,000 in the first week of June, the Department of Labor reported Thursday.
Economists had expected jobless claims, which are adjusted for seasonal variations, to edge up from 267,000 the previous week to 270,000. Thursday’s unexpected good news should help reassure investors and government officials about the health of the labor market.
The numbers of unemployment insurance claims, which are released weekly, have taken on special importance in recent months as payroll job growth has slowed to a monthly average of just 116,000.
Jobless claims also spiked in early May, thanks in large part to unusual seasonal increases in claims from teachers in New York and elsewhere, but then drifted back down, suggesting ongoing strength in the jobs recovery as it stretches toward its sixth year.
Thursday’s report indicates that jobless claims are still historically low. Initial claims have run below the 300,000 level for 66 straight weeks, the longest such streak since 1973, when the workforce was much smaller.
The 300,000 line is important because it is near the mark at which economists calculate higher claims would eventually translate into a rising unemployment rate.
Instead, at a monthly average of 269,500, claims suggest that layoffs are still relative infrequent and that job growth is likely to continue.
Thursday’s jobless claims numbers suggest that recent weak monthly payroll jobs report “greatly exaggerated the extent to which the trend in employment growth is weakening,” noted Jim O’Sullivan, an economic forecaster for High Frequency Economics.
