New US applications for unemployment benefits declined, signaling that the labor market continues to hold firm.
The US Labor Department said Wednesday that new claims for unemployment benefits totaled 226,000 for the week of June 7-13. The figure was down 4,000 from the previous week. It came in slightly above the market forecast of 225,000 compiled by Bloomberg.
Continuing claims, filed by those seeking benefits for two or more weeks, totaled 1.81 million for the week of May 31 to June 6, an increase of 24,000 from the previous week. This suggests that the time it takes for the unemployed to find new jobs is lengthening.
The prevailing view in the market is that the US labor market is holding up better than expected, even amid the surge in energy prices stemming from the war with Iran. Indeed, nonfarm payrolls rose by 172,000 in May from the previous month, far exceeding the market estimate of 85,000. As a result, concerns over a slowdown in employment have eased, and investors are increasingly pricing in the possibility that the Federal Reserve (Fed) will move toward additional rate hikes.
Bloomberg said the data "shows that the US labor market remains solid despite the energy price shock from the war with Iran," adding that "strong employment indicators are lending weight to the possibility of further tightening by the Fed."
