US labor market continues to remain strong

US initial jobless claims dropped 16k to 269k in the week ending 6 February from the prior week, below consensus expectations of 280k and Barclays forecast of 290k. In particular, seasonally adjusted state level initial claims reversed last week in states such as Pennsylvania, Tennessee, New Jersey and Illinois. Several of these temporary rises are likely to have been because of winter weather. In other places, initial claims dropped in California.

These drops together brought the four-week moving average of initial claims close to 281k, as compared with the previous 285k. Continuing unemployment claims for the week ending 30 January also dropped to 2.239mn, as compared with previous 2.260mn.

The insured jobless rate declined by one-tenth to 1.6%and the four-week moving average of claims declined to 2.248mn. The Labor Department's report suggests that the US labor market continues to be fundamentally strong.