First-time jobless claims unexpectedly fell last week and the number of Americans already receiving benefits tumbled to an almost 16-year low, consistent with a healthy labor market.
Applications to collect unemployment insurance dropped by 4,000 to 264,000 in the period ended June 4, Labor Department data showed on Thursday. The median forecast in a Bloomberg survey called for 270,000. Continuing claims decreased to 2.1 million in the previous week, the lowest since October 2000.
The report indicates companies remain reluctant to reduce headcounts even after figures last week showed May was the worst month for hiring in almost six years. Federal Reserve Chair Janet Yellen, who called the payrolls slowdown “concerning,” nonetheless pointed to claims as one of the more positive and timely indicators of the labor market.
“The pace of layoffs is staying incredibly low,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York, who projected a decline to 263,000. “If there was a sudden deterioration in demand for labor, you’d be seeing more layoffs.”
While there was nothing unusual in the data, claims for Maryland were estimated, according to the Labor Department.
The decline in initial filings to a six-week low compared with economists’ projections that ranged from 260,000 to 285,000 after a previously reported 267,000 in the prior week.
The four-week moving average, a less volatile measure than the weekly claims numbers, decreased to 269,500 last week from 277,000.
Filings have been below 300,000 for 66 consecutive weeks -- the longest stretch since 1973 and a level economists say is typically consistent with a healthy labor market.
The number of people continuing to receive jobless benefits dropped 77,000 in the week ended May 28. The unemployment rate among people eligible for benefits decreased to a record-low 1.5 percent. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings, and a sustained low level of applications has typically coincided with faster job gains. Layoffs may also reflect company- or industry-specific causes, such as cost-cutting or business restructuring, rather than underlying labor market trends.
Separate data from the Labor Department on Wednesday showed job openings rose in April to match the highest level since records began in 2000, indicating underlying demand in the labor market ahead of a sharp deceleration in payrolls last month.
The May payrolls report on June 3 showed employers added 38,000 workers to payrolls after a 123,000 advance in April. While the jobless rate fell to an almost nine-year low of 4.7 percent from 5 percent in April, it was driven by more people dropping out of the labor force.