First-time claims for unemployment benefits fell by 10,000 to 268,000 in the third week of May, the Department of Labor reported Thursday, providing an encouraging sign for job growth in the month.
Forecasters had expected claims to remain steady at around 275,000.
Jobless claims, a leading indicator of the labor market’s strength, had been running at historically low levels before jumping up in early May.
Despite Thursday’s decline, the monthly average of claims rose to 278,000, the highest since late January, thanks to higher numbers earlier in the month.
While May’s higher claims could foreshadow a weak jobs report for the month, some analysts have suggested they are predominantly driven by issues with the Labor Department’s adjustments for seasonal variations.
Goldman Sachs economist Elad Pashtan wrote in a note published before Thursday’s release that spring break temporary layoffs in New York and early temporary autoworker layoffs that usually come in the summer in auto-manufacturing states confounded the seasonal adjustments and were responsible for much of the increase. “We hold high conviction that recent gains in initial filings for unemployment insurance primarily reflect temporary factors rather than any deterioration in labor market conditions,” he wrote
With Thursday’s report, claims are still well below the 300,000 to 325,000 level that economists calculate would yield rising, rather than falling, unemployment.
In fact, claims have been below the 300,000 mark for 64 straight weeks, the longest such streak since 1973, when the workforce was significantly smaller.
