US weekly jobless claims total 268,000 vs 275,000 estimate

Weekly jobless claims total 268,000 vs. 275,000 estimate
Weekly jobless claims total 268,000 vs. 275,000 estimate

The number of Americans filing for unemployment benefits fell more than expected last week, moving back to near cycle lows as the labor markets remains healthy and the economy regains momentum after stumbling in the first quarter.

Initial claims for state unemployment benefits declined 10,000 to a seasonally adjusted 268,000 for the week ended May 21, the Labor Department said on Thursday. Claims for the prior week were unrevised.

Economists polled by Reuters had forecast initial claims falling to 275,000 in the latest week. Claims have now been below 300,000, a threshold associated with a strong job market, for 64 straight weeks, the longest stretch since 1973.

While the two consecutive weeks of decline helped to unwind some of the jump in claims between late April and early May, the trend in jobless claims has become less favorable.

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The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,750 to 278,500 last week.

Economists blame a range of factors for the recent spike in claims, including the different timing of school spring breaks, which often makes it difficult to adjust the data. An ongoing strike by Verizon workers as well as possible disruptions to manufacturing activity in the wake of recent earthquakes in Japan have also been cited.

Economists expect the strike by the about 40,000 Verizon employees will hurt May payrolls because they would be considered unemployed as they would not have received a paycheck during the survey period. The government will release its closely watched employment report next Friday.

A Labor Department analyst said there were no special factors influencing last week's claims data and only claims for Wyoming had been estimated.

The claims report showed the number of people still receiving benefits after an initial week of aid rose 10,000 to 2.16 million in the week ended May 14. The four-week average of the so-called continuing claims increased 8,500 to 2.15 million.

The continuing claims data covered the period during which the government surveyed households for May's unemployment rate. The four-week average of continuing claims fell 6,000 between the April and May survey periods. That suggests little change in the unemployment rate, which was at 5.0 percent in April.