The U.S. Labor Department reported a surprise drop in new unemployment claims for the week ending May 17. Initial jobless claims fell by 2,000 to 227,000, defying economists’ expectations of a rise to 230,000.
Despite this decline, the four-week moving average of new claims edged up slightly by 1,000 to 231,500, indicating some underlying volatility.
Continuing claims, which track the number of people receiving ongoing unemployment benefits, rose by 36,000 to 1.903 million in the week ending May 10.
This pushed the four-week moving average of continuing claims to 1.887 million, the highest since November 2021.
Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics, said the data show a labor market that remains stable enough for the Federal Reserve to hold its current policy while watching inflation and tariff impacts.
However, she noted that the rise in continuing claims suggests that workers who lose jobs are finding it harder to get new ones.
Overall, the job market shows mixed signals: fewer new claims but more people staying on unemployment rolls. This reflects ongoing challenges for some workers despite steady job growth elsewhere.
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