According to US Department of Labor (DoL) data, the first-time claims for the week ending May 31 were 442,000 – the highest in a month – up from a revised 426,000 the week before.
The latest claims increase helped push up the four-week moving average, to 430,500 from 427,500 in the prior week (See Americans Still Clinging to Jobless Rolls ). The average, stuck above the key 400,000 benchmark for 14 weeks, is closely watched because its irons out short-term fluctuations. The 400,000 figure is considered an indicator of an ailing labor market. “The labor market is still not taking part in a broader US recovery,” Rebecca Patterson, a global currency strategist with JP Morgan in New York, told Reuters.
In Thursday’s report, the number of people still drawing a week of benefits fell 18,000 to 3.7 million in the week to May 24, the latest week for which data are available. However, the so-called continued claims remain stubbornly high.
Analysts participating in Reuters regular poll had been looking for a May 31 week total of 420,000 first-time claims.
Economy watchers are eagerly waiting for May’s unemployment rate data due Friday for clues on whether the US Federal Reserve may cut interest rates. The unemployment rate for May is expected to be uncomfortably high, rising to 6.1% from 6% the previous month, as companies lack confidence in the economy to expand their workforce.
Just as importantly and just as closely watched will be Friday’s payroll data, which is expected to show a 39,000 decline in non-farm jobs after a 48,000 drop in April.