The number of Americans applying for first-time jobless benefits edged slightly lower last week to hold near a post-recession low, according to a weekly report from Washington on Thursday, representing the latest piece of info that the labor market is still getting stronger.
The Labor Department said that initial jobless claims, a proxy of weekly layoffs, dropped by 2,000 to a seasonally adjusted 312,000 in the week ended June 21. The figure would have been identical to the week prior had the number from the week ended June 14 not been upwardly revised by 2,000. Economists were predicting claims declining to 310,000 last week.
The four-month moving average, which flattens some week-to-week volatility and is regarded as a better look at labor trends, rose by 2,000 to 314,250. The one-month average has continued to hover near seven-year lows just above 300,000 for several weeks, which is well below the 350,000 mark that economists consider a sign of an improving job market.
Just for reference, during early 2009, claims were near 700,000.
The report today lends to employers keeping staffers as they bring on new workers. The U.S. added 217,000 new jobs in May and has averaged 213,600 per month in 2014, the best pace of new hires in 15 years. Economists are expecting that the nation added about 230,000 jobs this month and that the unemployment rate will nip down 0.1 percent to 6.2 percent. That data comes from the Labor Department on next Friday.
The below image shows the steady downward trend of initial jobless claims and the volatility subsiding in the past month after a choppy start to the year.
Continuing claims, the count of people already receiving state benefits, rose by 12,000 to a seasonally adjusted 2.571 million in the week ended June 14. Continuing claims are delivered at a one-week lag to initial claims. At the same time last year, continuing claims were higher by 406,000.
Total claims, or the number of people receiving benefits from all state and federal programs, decreased by 37,990 to 2.441 million. Total claims are reported at a two-week lag to initial claims. Total claims are nearly half of what they were at the same time in 2013 when they tallied 4.549 million.
The largest increases in initial claims for the week ending June 14 were in Pennsylvania (+7,120), California (+670) and Wisconsin (+542). The largest decreases were in Georgia (-2,245), Missouri (-2,130) and New York (-2,078).
In a separate report from Washington today, the Commerce Department said that consumer spending increased at a slower-than-expected pace in May, putting some pressure on stocks as consumer purchases represent about 70 percent of the U.S. economy. Consumer spending rose 0.2 percent in May, against economist expectations of a 0.4-percent rise. The measure of inflation in the report showed that inflation rose 1.8 percent from May 2013, pushing close to the Federal Reserve’s 2.0-percent target.
Rising inflation and a steadily improving labor market could lead to the central bank hiking interest rates sooner, rather than later. Driving that point down Wall Street’s throat was St. Louis Fed President James Bullard, who said interest rates may be lifted by March. This is a double-edged sword as the Fed regularly lowering its monthly bond purchases and thinking about when to raise its key interest rate is a clear signal of a strengthening economy, but Wall Street players worry about how the economy will do without the punch bowl of the Fed’s stimulus.
The markets are off their lows of the day, but still on track to fall for the third time in four sessions. With an hour left in trading Thursday, the Dow Jones Industrial Average is off by 31 points, the S&P 500 is down by 4 points and the Nasdaq is lower by 8 points.