U.S. Jobless Claims Decline, Signaling Stable Labor Market

The number of Americans filing new claims for unemployment benefits fell last week but remained at relatively elevated levels, suggesting some moderation in the pace of job growth in June, Lucia Mutikani reported for Reuters.

The number of Americans filing new claims for unemployment benefits fell last week but remained at relatively elevated levels, suggesting some moderation in the pace of job growth in June. (Photo: U.S. Department of Labor Facebook)

Economists largely dismissed concerns over the latest Labor Department report, with some arguing that the recent rise in claims may reflect seasonal distortions associated with the end of the school year.

Most analysts continue to view the labor market as stable enough for the Federal Reserve to focus on controlling inflation pressures.

The US central bank on Wednesday left its benchmark overnight interest rate unchanged at a range of 3.50 percent to 3.75 percent.

However, updated quarterly projections indicated policymakers expect borrowing costs to rise later this year because of growing inflation concerns.

"We don't expect claims to trend consistently higher from here," said Nancy Vanden Houten, lead US economist at Oxford Economics.

"Despite the bounce off recent lows, the level of initial claims is still consistent with a broad range of labor market indicators that show the job market has improved but isn't overheating. That will allow the Fed to keep policy on hold while it waits for inflation to come down," she added.

Initial claims for state unemployment benefits fell by 4,000 to a seasonally adjusted 226,000 during the week ended June 13, according to the Labor Department.

Economists surveyed by Reuters had expected 225,000 new claims. Claims had increased for three consecutive weeks before the latest decline, moving toward the upper end of this year's 190,000 to 230,000 range.