Fewer Americans than expected filed for initial jobless claims last week to dip back down near five-year lows and lend support to an improving labor market, according to the latest weekly report from the Labor Department on Thursday.
The agency reported that 334,000 people filed for first-time jobless benefits during the week ended June 8, down 12,000 from the unrevised 346,000 the week earlier. The lowest number of weekly claims in five years was recorded in April at 327,000. Economists were anticipating a slight increase in claims to 350,000.
No states were estimated and there was nothing unusual in the data, according to the Labor Department.
The four-week moving average, regarded as a better gauge of jobless trends because it eliminates weekly volatility, declined by 7,250 to 345,250 from the prior week’s unrevised number. Economists consider a figure under 350,000 to indicate moderate growth in the labor market.
Continuing claims, or those people that are already receiving jobless benefits not including those collecting extended benefits under federal programs, rose by 2,000 to 2.973 million. Those claimants that have used all entitled state benefits and are now collecting federal benefits increased by rose by 57,135 to 1.703 million.
The total number of Americans collected benefits under all programs decreased from 4.645 million to 4.515 million.
Investors have been closely monitoring the jobs market to try and glean hints as to when the Federal Reserve might begin to taper its massive $85-billion-per-month in monetary stimulus. While the fear was rising that the Fed could start to taper its efforts as early as this month, a report last week from the Labor Department showing that the unemployment rate ticked upward to 7.6 percent in May from 7.5 percent in April, calmed those fears. Fed officials will be meeting again next week, by the general consensus is that the main bank will continue its easing initiatives until at least September based on benign inflation rates and still some shakiness in labor trends.
In a separate report from Washington today, the Commerce Department said that retail sales surged more than expected in May. Retails sales jumped 0.6 percent during the month after a tepid 0.1 percent increase in April, signaling that increased taxes and spending cuts that were part of the so-called sequester earlier this year are not deterring consumers from spending money.
Following the markets tumbling for three consecutive days for the first time this year to start the week, the Dow has rebounded from being in the red in morning trading to be ahead by 72 points early in the afternoon session. The S&P 500 is up by 10 points and the tech-rich Nasdaq has advanced 18 points.