Filings for U.S. unemployment benefits unexpectedly declined last week to the lowest level since mid-April, signaling labor market stability amid a shaky global economy.
Jobless claims dropped by 16,000 to 254,000 in the week ended July 2, a Labor Department report showed Thursday in Washington. The median forecast in a Bloomberg survey called for 269,000. Filings can be volatile around holidays, and applications were estimated for five states and Puerto Rico for the period before Independence Day.
Hiring managers are holding the line on staffing levels based on a stable U.S. demand outlook even as the U.K.’s decision to leave the European Union roiled financial markets. Firings are lingering near four-decade lows, while economists are treating the recent dip in hiring as temporary ahead of the June payrolls report Friday.
“The labor market remains quite strong,” said Millan Mulraine, deputy head of U.S. macro strategy for TD Securities USA in New York. “It is encouraging in the sense that it doesn’t provide any evidence of a turn in labor market momentum, which I think is beginning to show up in other labor market reports.”
The number of applications last week was the lowest since the period ended April 16, when 248,000 claims were filed, the fewest since 1973. Filings have been below 300,000, a level economists say underscores a healthy labor market, for 70 straight weeks.
Estimates in the Bloomberg survey ranged from 255,000 to 275,000. The Labor Department revised the prior week’s reading to 270,000 from an initially reported 268,000.
While there was nothing unusual in the data, according to the Labor Department, claims in the following states were estimated: Virginia, Wyoming, Nebraska, Kansas and Hawaii.
The four-week average of claims, a less-volatile measure than the weekly figure, declined to 264,750 from 267,250 in the prior week.
The number of people continuing to receive jobless benefits decreased by 44,000 to 2.12 million in the week ended June 25. The unemployment rate among people eligible for benefits held at 1.6 percent. These data are reported with a one-week lag.
While the number of applications for jobless benefits has been lean, employers have recently slowed the pace of hiring. Payrolls rose 38,000 in May, the fewest in almost six years, and the prior month’s 123,000 advance was less than initially reported, Labor Department figures showed last month.
The unemployment rate fell to an almost nine-year low with more Americans dropping out of the labor force.
Economists project a rebound in June payrolls after the weakest two months since the start of 2011. Hiring picked up last month by about 180,000, according to the median estimate in a Bloomberg survey ahead of Friday’s Labor Department report.
Data from the ADP Research Institute on Thursday showed companies added 172,000 jobs last month.