U.S. Jobless Claims Pull Back From Nearly Four-Month High

After reporting first-time claims for U.S. unemployment benefits at their highest level in almost four months in the previous week, the Labor Department released a report on Thursday showing initial jobless claims pulled back by more than expected in the week ended May 21st.

The report showed initial jobless claims dipped to 210,000, a decrease of 8,000 from the previous week’s unrevised level of 218,000. Economists had expected jobless claims to edge down to 215,000.

The bigger than expected pullback came after the increase seen in the previous week lifted jobless claims to their highest level since the week ended January 22nd.

“The shortfall in labor supply will likely prevent widespread layoffs, though there may be some pockets of weakness in sectors that hired at an aggressive pace during the pandemic,” said Mahir Rasheed, U.S. Economist at Oxford Economics. “We expect claims to remain low in the near term.”

Meanwhile, the Labor Department said the less volatile four-week moving average rose to 206,750, an increase of 7,250 from the previous week’s unrevised average of 199,500.

The report showed continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also increased by 31,000 to 1.346 million in the week ended May 14th.

In the previous week, continuing claims dropped to their lowest level since hitting 1.304 million in the week ended December 27, 1969.

The four-week moving average of continuing claims still fell to a new 52-year low of 1,347,500, a decrease of 14,250 from the previous week’s revised average of 1,361,750.

“We expect continued claims to hover near these historically low levels as the economy continues to add jobs and labor supply progresses further in the months ahead,” said Rasheed.

Next Friday, the Labor Department is scheduled to release its more closely watched report on the employment situation in the month of May.

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