Initial Jobless Claims Decline During Key Data Week

The number of people filing new unemployment claims declined by 8,000, with 215,000 Initial Jobless Claims reported in the latest week. This followed a decline of 9,000 in the previous week, marking the biggest back-to-back drop since September. Continuing Claims rose by 8,000, with 1.794 million people still receiving benefits after filing their initial claim.

What’s the bottom line? Initial Jobless Claims came in below estimates, while Continuing Claims are also still trending near some of the hottest levels we’ve seen in recent years. The dynamic we’ve been seeing in the labor sector continues, where employers are trying to hold on to workers, but once people are let go it’s more challenging for them to find new employment.

Note that this was an important real-time report because it includes the sample week that the Bureau of Labor Statistics will use in the modeling for their job growth estimates for May’s Jobs Report. While this is just one component, the low reading of 215,000 initial unemployment claims could point to strong job growth when May’s report is released June 7.

The Fed will be closely analyzing this report for signs of labor sector softening as it weighs the timing for rate cuts this year.