The steep decline in weekly jobless claims reported by the Labor Department on Thursday reversed the surge in the prior week, which had boosted them to the highest level since Oct. 30, 2021. That increase was largely blamed on an unusual jump in applications for unemployment insurance in Massachusetts.
The labor market is being closely watched for signs of stress from the Federal Reserve's fastest monetary policy tightening campaign since the 1980s. The U.S. central bank is expected to keep interest rates unchanged next month for the first time since it started hiking them in March 2022. Claims were little changed between the April and May survey weeks. The economy created 253,000 jobs in April, with the unemployment rate falling back to a 53-year low of 3.4%.
Economists at Goldman Sachs speculated that the annual revision last month to the seasonal factor, the model that the government uses to strip out seasonal fluctuations from the data, could be distorting the continuing claims.