US weekly jobless claims fall amid labour market resilience

[WASHINGTON] The number of Americans filing claims for unemployment benefits fell last week, pointing to labour market resilience and giving the Federal Reserve room to focus on rising inflation.

Initial claims for state unemployment benefits slipped 3,000 to a seasonally adjusted 209,000 for the week ended May 16, the Labor Department said on Thursday (May 21). Economists polled by Reuters had forecast 210,000 claims for the latest week. Though economists expect claims to rise in the summer because of a seasonal quirk, the labour market remains in a holding pattern. Financial markets expect the US central bank to keep its benchmark overnight interest rate in the 3.50 per cent-3.75 per cent range into next year.

The US-Israel war with Iran has disrupted shipping in the Strait of Hormuz, boosting oil prices and those of other commodities, including fertilisers, petrochemicals and aluminium. Minutes of the central bank’s April 28-29 meeting published on Wednesday showed concerns about inflation being stoked by the Iran war intensified last month, with a growing number of policymakers saying the Fed should lay the groundwork for a possible rate hike.

Policymakers “generally expected labour market conditions to remain stable in the near term,” the minutes showed, though most judged “that risks to the employment side” of the Fed’s “dual mandate were tilted to the downside.”

Last week’s claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of May’s employment report. Payrolls increased by 115,000 jobs in April after rising 185,000 in March. The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 6,000 to a seasonally adjusted 1.782 million during the week ended May 9, the claims report showed. REUTERS