US weekly jobless claims fall, but still elevated

[WASHINGTON] The number of Americans filing new applications for unemployment benefits fell last week, but stayed at levels consistent with a further loss of labour market momentum in June.

Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 245,000 for the week ended Jun 14, the Labor Department said on Wednesday (Jun 18). Economists polled by Reuters had forecast 245,000 claims for the latest week.

The report was released a day early because of the Juneteenth National Independence Day holiday on Thursday.

Claims are in the upper end of their range for this year and could remain there, with non-teaching staff in some states eligible to file for unemployment benefits during the summer school holidays.

Though some technical factors accounted for the elevation in claims, there has been a rise in layoffs, with economists saying President Donald Trump’s broad tariffs had created a challenging economic environment for businesses. The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of June’s employment report.

Federal Reserve officials wrapping up their two-day policy meeting on Wednesday are expected to leave the US central bank’s its benchmark overnight interest rate in the 4.25 to 4.5 per cent range, where it has been since December, while monitoring the economic fallout from the import duties and the conflict between Israel and Iran.

The still historically low layoffs have accounted for much of the labour market stability, with the hiring side of the equation soft amid hesitancy by employers to increase headcount because of the unsettled economic environment. Nonfarm payrolls increased by 139,000 jobs in May, down from 193,000 a year ago.

Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, could shed more light on the state of the labour market in June.

The so-called continuing claims dropped 6,000 to a seasonally adjusted 1.945 million during the week ending Jun 7. Recently laid off workers are struggling to find work. REUTERS