U.S. jobless claims decline; wholesale inventories hit 10-month high
The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to sustained strength in the labor market despite a sharp slowdown in hiring last month.
Other data on Thursday showed wholesale inventories recording their biggest increase in 10 months in April, prompting economists to raise their second-quarter economic growth estimates. The rise in inventories came even as sales at wholesalers rose for a second straight month.
Initial claims for state unemployment benefits declined 4,000 to a seasonally adjusted 264,000 for the week ended June 4, the Labor Department said. The drop confounded economists’ expectations for an increase to 270,000.
“The hand-wringing over the May jobs report may be misplaced,” said Joel Naroff, chief economist at Economic Advisors in Holland, Pennsylvania.
Claims have dropped by 30,000 since surging to 294,000 in early May. They have now been below 300,000, a threshold associated with a strong job market, for 66 straight weeks, the longest streak since 1973.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 7,500 to 269,500 last week.
The claims report offered the latest sign that the labor market remains strong even though the economy added only 38,000 jobs in May, the smallest gain since September 2010. A report on Wednesday showed job openings hitting a nine-month high in April and layoffs falling to their lowest level since September 2014.
“The underlying trend to a tighter labor market remains intact. It seems clear that the problem with the jobs market is hiring new employees that are suitable for available positions, which in itself is a sign of labor market tightness,” said John Ryding, chief economist at RDQ Economics in New York.
Prices for U.S. Treasuries rose as a broad decline on commodity and stock markets boosted the appeal of low-risk assets. The dollar .DXY rose against a basket of currencies, while U.S. stocks fell.