U.S. jobless claims fall to near 43-year low

white-houseThe number of Americans filing for unemployment benefits fell last week to near a 43-year low, suggesting labour market resilience even though hiring slowed sharply in May.

The drop in jobless claims could give Federal Reserve officials more confidence that job growth will pick up.Fed Chair Janet Yellen told lawmakers on Tuesday that the U.S. central bank believed the slowdown in non-farm payroll gains was “transitory,” noting that “several other timely indicators of labour market conditions still look favourable.”

“Overall labour market conditions are not as bad as one might assume based on May’s non-farm payroll print alone,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

Initial claims for state unemployment benefits declined 18,000 to a seasonally adjusted 259,000 for the week ended June 18, the Labour Department said on Thursday.

The drop was the largest since February and left claims not too far from a 43-year low touched in March. Economists polled by Reuters had forecast initial claims falling only to 270,000 in the latest week.

Claims have now been below 300,000, a threshold associated with a strong job market, for 68 straight weeks, the longest streak since 1973.The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 2,250 to 267,000 last week.

U.S. financial markets were little moved by the report as investors anxiously awaited the results of Britain’s referendum on European Union membership late on Thursday.

The claims report covered the survey period for June non-farm payrolls. The four-week average of claims declined 8,750 between the May and June survey periods, suggesting an improvement in job growth after payrolls increased only 38,000 in May – the smallest increase since September 2010.

Labour market optimism is being spurred by near record high job openings, as well as the very low layoffs.Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid fell 20,000 to 2.14 million in the week ended June 11. The four-week average of the so-called continuing claims slipped 4,500 to 2.15 million.

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