U.S. initial jobless claims stay at low levels in mid-May, labor market conditions continue to improve

The U.S. initial jobless claims rose slightly in the week ended 20 May, coming in below consensus expectations. The jobless claims rose to 234k, as compared with consensus expectations of 238k. The four-week moving average dropped to 235k. Weekly initial jobless claims is now close to historical lows while the four-week moving average in initial claims set a new low for this recovery.

In the meantime, continuing claims for the week ended 13 May was up to 1923k; however, they stayed lower than the 2 million level for the sixth straight week. The insured jobless rate remained stable at 1.4 percent. State-wise, claims dropped in 25 out of 53 states covered, with the largest drops seen in Oregon, Tennessee and Connecticut. Meanwhile, California and Michigan recorded the biggest rise in claims.

In all, the initial and continuing claims data continue to imply rebounding U.S. labor market conditions. The data is viewed as supportive of ongoing growth in employment at rates enough to keep the jobless rate on a downward path. There is no sign from the claims data that rates of firing are accelerating, stated Barclays in a research report.