Even through hiring slowdown in May, the number of U.S. jobless claims down last week to nearly 43-weeks low which suggesting America labor market resilience. Labor department announced on Thursday that jobless claims decrease by 18,000 to 259,000 in the period ended June 18.
“The message from claims continues to be that the April and May payrolls data greatly exaggerated the extent to which the trend in employment growth is weakening,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics, Ltd.
Unemployment have now been below 300,000 for 68 straight weeks which is the longest period since 1973. The four-week moving average of jobless claims, considered a better measure of labor market trends, down 2,250 to 267,000 last week. The decline in jobless claims could give Federal Reserve officials more confidence for labor market growth.
Janet Yellen offered a subtle change in her language earlier this week in testimony before the Senate Banking Committee, saying officials would judge “whether the labor market will strengthen further,” rather than when, in determining changes to the federal funds rate. At the same time, she said, “it is important not to overreact to one or two reports, and several other timely indicators of labor market conditions still look favorable.”
“Consumers have not retrenched. The spring selling season was solid … builders indicate they are supply constrained, not demand constrained,” said Michelle Girard, chief economist at RBS in Stamford, Connecticut. “This suggests the strength seen in new home sales this spring may well be sustained throughout the summer.”