US jobless claims hold steady at 20-month high, current account gap widens

THE number of people filing for state unemployment benefits for the first time held steady at a 20-month high last week, remaining elevated for a third straight week, in what may be an early indication of a softening labour market in the face of the Federal Reserve’s aggressive credit tightening.

Data from the Bureau of Labor Statistics on Thursday (Jun 22) showed 264,000 new claims were filed for jobless benefits on a seasonally adjusted basis in the week ended June 17, unchanged from the prior week’s upwardly revised level, which is the highest level of initial claims activity since October 2021.

The median expectation among economists polled by Reuters was for 260,000 new claims.

Meanwhile, the ranks of all those continuing to receive benefits beyond the first week fell to 1.759 million in the week ended June 10 from a revised 1.772 million the week before. The latest reading compared with a median economists’ estimate of 1.782 million so-called continued claims.

The government also reported that the US current account deficit – the broadest measure of the flow of goods, services and investments into and out of the country – widened modestly in the first three months of 2023, snapping three quarters of narrowing.

The Commerce Department said the current account gap grew to US$219.3 billion in the first quarter from a revised US$216.2 billion in the fourth quarter of 2022. Economists in a Reuters poll had estimated it widening to US$217.5 billion. REUTERS