US weekly jobless claims fall, but remain elevated

By Lucia Mutikani WASHINGTON, June 18 (Reuters) - The number of Americans filing claims for unemployment benefits fell last week, but remained at slightly higher levels, suggesting some moderation in the pace of job growth in June. Economists largely shrugged off the report from the Labor Department on Thursday, ‌with some pointing out that the recent elevation in claims was likely due to seasonal distortions related to the end of the school year. They ‌viewed the labor market as remaining stable enough for the Federal Reserve to focus on stamping out inflation, stoked by the Iran war. The U.S. central bank on Wednesday kept its benchmark overnight interest rate ​in the 3.50%-3.75% range, but updated quarterly projections showed policymakers expected to raise borrowing costs this year amid growing concerns about inflation. "We don't expect claims to trend consistently higher from here," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics. "And despite the bounce off the recent lows, the level of initial claims is still consistent with a broad range of labor market indicators that show the job market has improved but isn't overheating. That will allow the Fed to keep policy on hold while it waits for inflation ‌to come down." Initial claims for state unemployment benefits dropped ⁠4,000 to a seasonally adjusted 226,000 for the week ended June 13, the Labor Department said. Economists polled by Reuters had forecast 225,000 claims for the latest week. Claims had increased for three straight weeks, pushing to the upper end of their 190,000-230,000 range ⁠for this year. Last week, there were notable increases in unadjusted claims in Oregon and Minnesota, among the few states that allow non-teaching staff to file for unemployment benefits during the months-long school holidays. Seasonal factors, the model used by the government to strip out seasonal fluctuations from the data, do not always capture these moves. Claims in Pennsylvania rose 3,734 last week ​after ​surging 5,381 in the prior week, an increase that was attributed to layoffs in transportation and ​warehousing, administrative and support and waste management and remediation services industries ‌as well as in accommodation and food services, healthcare and social assistance. THE LABOR MARKET IS STABLE The labor market has regained momentum, posting three straight months of strong job gains, after wobbling in 2025. Lower layoffs have kept the unemployment rate at 4.3% for three consecutive months. Fed Chair Kevin Warsh told reporters that members of the U.S. central bank's policy-setting committee "thought that the labor markets were stable," and "there were some people around the committee who thought that it was trending better than that." Warsh added, "I'd say the jobs data has been moving in a good direction." The claims data covered the period during which the government surveyed businesses and other establishments for the nonfarm payrolls ‌component of June's employment report. Claims increased between the May and June survey weeks. "That hints ​at some potential slowing in June job creation," said John Ryding, senior economic advisor at Brean Capital. "However, ​if we are looking at the broader trend, which Chair Warsh wants ​to do, there is little evidence of a change in the mean-reverting statistical process that has described weekly jobless claims." Nonfarm payrolls increased ‌by 172,000 jobs in May. Part of the strength in job ​growth is likely from low layoffs as ​some business surveys have shown weakness in employment measures. Economists say policy uncertainty, including import tariffs last year and now the Middle East conflict, is constraining hiring. The U.S. and Iran have signed a ceasefire agreement. The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, ​increased 24,000 to a seasonally adjusted 1.81 million during the ‌week ended June 6, the claims report showed. The increase in the so-called continuing claims aligns with data showing many unemployed people are experiencing long ​bouts of joblessness. The median duration of unemployment jumped to 11.6 weeks in May, the longest stretch since November 2021, from 11.0 weeks ​in April, the government reported this month. (Reporting by Lucia Mutikani; Editing by Andrea Ricci) Recommended Stories