Initial Jobless Claims Fall as U.S. Layoffs Prove Temporaryby and
Applications continue to recede from more than one-year high
Claims in Michigan fell most last week on unadjusted basis
Jobless claims fell for a second week, indicating the surge at the start of May reflected temporary dismissals.
Initial applications for unemployment benefits dropped by 10,000 to 268,000 in the week ended May 21, a report from the Labor Department showed Thursday. The median forecast of 49 economists surveyed by Bloomberg projected 275,000 claims.
Sustained declines in claims from the more than one-year high at the start of the month signals those increase were due to transitory events such as the spring break holiday at schools in New York and auto plant shutdowns in Michigan. That shows employers remain intent on retaining experienced workers amid prospects demand will start to firm after the economy stumbled in the first quarter.
Claims are “trending very, very low -- not a whole lot of job destruction out there,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida. “The job market is still doing really, really well.”
Economists’ estimates in the Bloomberg survey for weekly jobless claims ranged from 270,000 to 297,000. The previous week’s figure was unrevised at 278,000.
Wyoming estimated data last week and otherwise there was nothing unusual in the figures, according to the Labor Department.
The four-week moving average of claims, a less volatile measure than the weekly figures, increased to 278,500 from 275,750.
The number of claims is receding after jumping to 294,000 in the first week of May, a more than one-year high. Applications by cafeteria and janitorial staff at New York schools reflecting the spring break holiday and by auto workers in Michigan were probably behind the jump. On an unadjusted basis, Michigan showed the biggest decrease in claims last week.
The number of people continuing to receive jobless benefits rose by 10,000 to 2.16 million in the week ended May 14. The unemployment rate among people eligible for benefits held at 1.6 percent, where it’s been since mid-February. 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 can also reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
(Updates with economist comment in fourth paragraph.)