U.S. unemployment benefits applications fell last week by the most since October 2021 in a week that included the Juneteenth holiday.
Initial jobless claims decreased by 26,000 to 239,000 in the week ended June 24, according to the Labor Department’s Thursday report. The figure was lower than all estimates in a Bloomberg survey of economists.
Continuing claims, which include those who have received unemployment benefits for more than one week, dropped to 1.7 million for the week ended June 17.
Despite the drop in claims, demand for workers has been easing slowly as more than a year’s worth of interest-rate hikes from the Federal Reserve work their way through the economy. Chair Jerome Powell said this week the labor market has been cooling in a way the central bank would have hoped, which, if sustained, could limit job losses down the line.
The claims data can be choppy from week to week, especially around holidays, and this period included the Juneteenth holiday. The four-week moving average in initial claims, which smooths out some of that volatility, ticked up to 257,500, still the highest since late 2021.
On an unadjusted basis, claims decreased to 233,048, led by California, which reversed a large jump from the prior period. Texas also saw a significant drop in applications.
A separate report Thursday showed U.S. first-quarter gross domestic product was revised up significantly to a 2% annualized advance, according to the Bureau of Economic Analysis’ third estimate of the figure. The stronger print reflected upward adjustments to exports and consumer spending.
Consumer spending, the engine of the U.S. economy, rose at an annualized 4.2%, the strongest pace in nearly two years.
—With assistance from Reade Pickert and Jordan Yadoo.
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