There’s good news about the robust labor market and firming inflation. But that good news has most likely cemented expectations that the Federal Reserve will raise interest rates next week.
Many economists believe the U.S. central bank will raise rates two more times after its June 12-13 policy meeting to prevent the economy from overheating.
The federal government lifted borrowing costs in March and predicted at least two more rate increases for this year.
State unemployment benefits decreased by 1,000 to a seasonally adjusted 222,000 for the week that ended June 2. Claims data for the prior week was revised to show 2,000 more applications received than previously reported.
Reuters polled economists forecast claims rising to 225,000 in the latest week. Prices of U.S. Treasuries held at lower levels after the data was released, while the dollar pared losses against a basket of currencies. U.S. stock index futures were trading mixed.
The labor market is apparently close to or at full employment. Non-farm payrolls increased by 223,000 jobs in May and the unemployment rate dropped to an 18-year low of 3.8 percent.
The jobless rate is now at a level where the Fed projected it would be by the end of this year.
Layoffs have remained very low in the wake of signs of growing worker shortages across all sectors of the economy. Data on Tuesday showed there were a record 6.7 million job openings in April. The number of unemployed people per vacancy slipped to 0.9 from 1.0 in March.
The four-week moving average of initial claims rose 2,750 to 225,500 last week.
The claims report also showed the number of people receiving benefits after an initial week of aid increased 21,000 to 1.74 million in the week ended May 26. The four-week moving average of the so-called continuing claims dropped 13,250 to 1.73 million. This is the lowest level since December 1973.
Share this:
