U.S. Weekly Jobless Claims Unexpectedly Drop To 334,000

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In a positive sign for the U.S. jobs market, the Labor Department released a report on Thursday showing that first-time claims for unemployment benefits unexpectedly decreased in the week ended June 8th.

The Labor Department said initial jobless claims fell to 334,000, a decrease of 12,000 from the previous week's unrevised figure of 346,000.

The modest decrease came as a surprise to economists, who had been expecting initial jobless claims to edge up to 350,000.

With the unexpected decrease, jobless claims fell for the second consecutive week, pulling back toward the five-year low of 327,000 set in the week ended April 27th.

The report also showed that the less volatile four-week moving average dipped to 345,250, a decrease of 7,250 from the previous week's unrevised average of 352,500.

Chris Low, chief economist at FTN Financial, said, "Both claims and the four-week average are higher than they were in early April, but the drop is consistent with a gradually falling trend in the rate of layoffs."

Meanwhile, continuing claims, a reading on the number of people receiving ongoing unemployment assistance, edged up to 2.973 million in the week ended June 1st from the preceding week's revised level of 2.971 million.

The four-week moving average of continuing claims fell to 2,967,250, a decrease of 12,750 from the preceding week's revised average of 2,980,000.

Last Friday, the Labor Department released a separate report showing that U.S. employment increased by a little more than economists had anticipated in the month of May

The report said non-farm payroll employment rose by 175,000 jobs in May following a downwardly revised increase of 149,000 jobs in April.

Economists had been expecting employment to increase by about 167,000 jobs compared to the addition of 165,000 jobs originally reported for the previous month.

Despite the continued job growth, the unemployment rate edged up to 7.6 percent in May from 7.5 percent in April, reflecting an increase in the size of the labor force.

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