US jobless claims drop more than expected

The number of Americans filing for unemployment benefits fell more than expected last week, according to data from the Labor Department.

US initial jobless claims dropped by 15,000 to 233,000 from the previous week's level, which was revised up by 1,000 to 248,000. Economists had been expecting a smaller decline to 245,000.

Meanwhile, the four-week moving average came in at 243,750, down 2,250 from the previous week's level, which was revised up by 250 to 246,000.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Pantheon Macroeconomics said: "Back to the drawing board; we got this spectacularly wrong. Our take on the seasonals pointed to a hefty temporary spike in claims, but instead they have reverted to the lower end of the recent range. Regardless of the latest weekly observation, the trend in claims remains at an all-time low as a share of payrolls, with no sign of any shift, in either direction. With survey-based measures of labor demand still very strong at the same time, we have to expect robust payroll growth to continue over the summer, at least, pushing the unemployment rate to new
cycle lows."