Initial jobless claims unexpectedly fell last week by 4,000 to 264,000.
Economists had estimated that the number of first-time filings for unemployment benefits rose to 270,000 last week. The prior period’s tally was revised up to 268,000 from 267,000.
But the four-week average, which evens out some of the volatility of the series, fell by 7,500 to 269,500.
“Following some swings in the data across April and May, the most recent few claims figures have been fairly steady and are probably a decent signal of the underlying trend in the data,” said JPMorgan’s Daniel Silver in a note.
“Overall, the claims data seem to signal that there has been some cooling in the labor market relative to where we were a few months ago, but that conditions still remain healthy.”
Since last Friday’s weak jobs report raised some concerns about the labor market, economists have weighed in on how important it is to track the initial jobless claims numbers.
Citi’s Steven Englander pointed out before the start of recessions, claims usually spike in the months after nonfarm payrolls tanked, Bloomberg wrote. And so in a sense, this is one of the big numbers to pay more attention to.
But in a note Thursday, Pantheon Macroeconomics’ Ian Shepherdson contends that weekly claims are not always the best indicator of a downturn because when things start to go bad, employers first slow the pace of hiring before firing people.
Either way, initial claims remain near a 42-year low, and have been one of the better-looking indicators of the jobs market. For 66 weeks now, claims have not climbed above 300,000.