WASHINGTON–The number of Americans filing new applications for jobless benefits fell last week, a sign the job market could be rebounding after May’s abrupt hiring slowdown.
Initial claims for unemployment benefits, a proxy for layoffs across the U.S., fell 16,000 to a seasonally adjusted 254,000 in the week ended July 2, the Labor Department said Thursday.
Economists surveyed by The Wall Street Journal had expected 267,000 new claims. Claims for the week ended June 25 were revised up slightly to 270,000.
Data on unemployment claims can be volatile from week to week. The Labor Department said no special factors affected last week’s figure.
The four-week moving average, which helps even out short-run swings in the data, fell last week to a seasonally adjusted 264,750.
Jobless claims have been falling from their peak in the spring of 2009, toward the recession’s end. They touched a four-decade low in April, and have mostly remained modestly above that level since. New claims have remained below 300,000 for 70 straight weeks, the longest streak since 1973, when the U.S. workforce was far smaller than it is today.
Thursday’s release covers the first full week following the U.K.’s decision to leave the European Union, but it was not immediately clear whether or how the uncertainty generated by the Brexit vote has impacted the U.S. labor market. Last week’s claims figures are in keeping with the historically low levels seen throughout 2016.
Low levels of claims typically coincide with ongoing job creation. But hiring slowed in May, with employers adding just 38,000 jobs, the weakest gain since September 2010. Average monthly job growth over the prior three months was 116,000, a sharp slowdown from the 229,000 averaged monthly over the prior year. June’s eagerly anticipated jobs report will be released Friday morning.
Economists expect a hiring rebound in June–with an expected gain of 165,000 jobs–but it is possible that the economy is in a later stage of the business cycle in which both layoffs and new job openings are subdued.
Federal Reserve Chairwoman Janet Yellen took note of the recent hiring slowdown in testimony to Congress in June, but said it was “important not to overreact to one or two reports,” and noted that wage growth appeared to be picking up.
“We will be watching the job market carefully to see whether the recent slowing in employment growth is transitory, as we believe it is,” she said. Speaking Tuesday to business leaders in upstate New York, New York Fed president William Dudley said modest economic growth of just under 2% this year was still high enough to generate job gains.
Fed officials next meet on July 26-27 to discuss the state of the economy and the direction of monetary policy.
Thursday’s report showed continuing unemployment claims, reflecting workers drawing jobless benefits for more than one week, fell 44,000 in the week ended June 25 to 2,124,000, although the previous week also saw an upward revision of 48,000. Continuing claims are reported with a one-week lag. The unemployment rate for those covered by unemployment insurance held steady at the previous week’s revised rate of 1.6%.