US weekly jobless claims fell in latest week

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits fell last week, but overall strength in the jobs market persisted despite a gradual cooling.

Initial claims for state unemployment benefits declined 5,000 to a seasonally adjusted 238,000 for the week ended June 15, the Labor Department said on Thursday. That reversed 5,000 of the surge in the prior week, which had pushed up claims to a 10-month high.

Economists polled by Reuters had forecast 235,000 claims in the latest week.

Labor market momentum is ebbing in tandem with the overall economy following 525 basis points worth of interest rate hikes from the Federal Reserve since 2022 to tame inflation. Loosening labor market conditions have led to inflation pressures subsiding and keeping a rate cut this year on the table.

The U.S. central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range since last July.

The claims data covered the period during which the government surveyed employers for the nonfarm payrolls component of June’s employment report.

Though job growth accelerated in May, that likely overstates the health of the labor market. The unemployment rate rose to 4.0% in May for the first time since January 2022 amid signs that laid off workers could be having a rough time find new jobs.

Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, could offer more clues on the state of the labor market in June. The so-called continuing claims edged up to a seasonally adjusted 1.828 million during the week ending June 8, the claims report showed.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)