The number of Americans applying for jobless benefits fell last week and U.S. private sector employment data is better than expected in June, both suggesting the labor market may be rebounding after May’s paltry gain.
Claims for unemployment benefits fell 16,000 to a seasonally adjusted 254,000 for the week ended July 2, the Labor Department said Thursday. The data is better than analysts’ estimates, analysts had projected the number to be 270,000. This also marked the lowest level since mid-April.
Analysts also warn that unemployment claim could be volatile from week to week. Many factors could impact the data significantly. However, The Labor Department said no special factors affected last week’s labor figure.
“I can’t think of a single labor market indicator that has been released over the past month that supports the abrupt slowdown in hiring signaled by the May payroll figures,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “I look for a return to normalcy tomorrow.”
In a separate report, the ADP National Employment Report showed that 172,000 jobs were added in June in the private sector. The figure beat market expectations for a 159,000 gain.
“The two main employment-related reports from this morning beat expectations and signaled that conditions remain relatively healthy in the job market,” said Daniel Silver, an economist at J.P. Morgan Chase and Co.
Labor market condition is a key indicator for Federal Reserve Chairwoman Janet Yellen to decide whether to increase interest rate. Now investors are looking forward to the June payrolls report on Friday, which includes both private and public employment data. A strong job report may increase the probability of rate hike.