A report released by the Labor Department on Thursday showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended May 20th.
The Labor Department said initial jobless claims crept up to 229,000, an increase of 4,000 from the previous week’s downwardly revised level of 225,000.
Economists had expected jobless claims to inch up to 245,000 from the 242,000 originally reported for the previous week.
Jobless claims in the week ended May 6th were also downwardly revised to 231,000 from 264,000, which had marked the highest level since the week ended October 30, 2021.
Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics, noted the unusually large downward revisions to claims in the prior two weeks included large downward adjustments to claims in Massachusetts, where claims had recently been inflated by fraudulent filings.
The report also showed the less volatile four-week moving average came in at 231,750, unchanged from the previous week’s revised average.
Meanwhile, the Labor Department said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, edge down by 5,000 to 1.794 million in the week ended May 13th.
The four-week moving average of continuing claims also slipped to 1,800,250, a decrease of 12,250 from the previous week’s unrevised average of 1,812,500.
“After climbing through much of Q1, initial claims have mostly moved sideways, a reminder that labor market conditions are still tight,” said Vanden Houten.
She added, “While we expect the Fed to leave rates steady at its June meeting, the minutes from this month’s FOMC meeting made clear that a more significant loosening of labor market conditions is needed to keep rate hikes permanently off the table.”
Next Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for May.
Economists currently expect employment to increase by 180,000 jobs in May after jumping by 253,000 jobs in April, while the unemployment rate is expected to hold at 3.4 percent.
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