U.S. initial jobless claims drop in early June, continues to signal sound labor market

Initial and continuing jobless claims in the U.S. continue to hint little to no change with respect to the separation side of the labor market since the beginning of 2017. The rates of separation are viewed as low by historical standards and in line with a sound labor market.

“We are paying close attention to claims data in the coming weeks for clues about whether the slowdown in employment in May will be followed by an increase in the rate of separations on the theory that firms may reduce hiring first and increase layoffs second”, noted Barclays in a research report.

But if the employment data for May were held down by calendar day effects and the timing of the survey week, then initial claims data is likely to remain stable at low levels.

For the week ending 3 June, initial jobless claims dropped 10,000 to 245,000, coming in modestly above consensus estimates of 240,000. Claims data for the earlier week were upwardly revised by 7000 to 255k. This left the four-week moving average at 242k, consistent with where the series has been since late January. Continuing claims for the week ended 27 May dropped 2000 to 1.917mn from 1.919 a week earlier, and the four-week moving average remained unchanged at 1.915mn.

The insured jobless rate remained stable at 1.4 percent for the eighth straight week. Meanwhile, state wise, 22 states registered a rise in claims, with the largest rises coming in Pennsylvania, Iowa, Illinois and Arkansas. Rises in states were countered by drops in remaining states, with the largest drops reported by Tennessee and California.

At 16:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 19.3346. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex