First-time claims for unemployment benefits showed a modest increase in the month in the week ended June 13th, according to a report released by the Labor Department on Thursday, although the report also showed a decrease in continuing claims.
The report showed that initial jobless claims rose to 608,000 from the previous week's revised figure of 605,000. Economists had expected jobless claims to edge up to 604,000 from the 601,000 originally reported for the previous week.
While weekly claims remained above the 600,000 level for the twentieth consecutive week, analysts have pointed out that the pace of layoffs appears to have stabilized.
Peter Boockvar, equity strategist at Miller Tabak noted, As the economy has stabilized at still weak levels, it has of course lent support to optimism that the stabilization is a precursor to growth.
With this belief, employers grow more reluctant to fire people on the hopes that when business picks up they will be needed, and a corollary is that some employers take advantage of the available pool of workers and start to hire in anticipation of a pickup in demand, he added.
The Labor Department also said that the less volatile four-week moving average fell to 615,750 from the previous week's revised average of 622,750.
As mentioned above, the report also showed that continuing claims fell to 6.687 million in the week ended June 6th from the preceding week's revised level of 6.835 million. This marks the first drop in continuing claims since the week ended January 3rd.
However, continuing claims in the week ended May 23rd were originally reported lower than in the previous week before being revised upwards. So, it remains to be seen if the drop in continuing claims will hold up.
Additionally, Lou Brien, market strategist with DRW Trading Group noted, It is difficult to say how much of the drop in Continuing Claims is due to the 'exhaustion rate.'
As of April 30, the rate at which claimants use up their benefits without leaving the program by becoming employed was a record high of 47.06 percent, Brien added.
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