The number of initial jobless claims filed in the US last week was unchanged, pointing to strength and stability in the labor market despite a general economic slowdown.
Key Takeaways
- There was no change in the number of US initial jobless claim applications last week with 218,000 applications for the week ended June 1.
- Data for the week prior was revised upward by 3,000 applications.
- Analysts are viewing the data as positive for the labor market.
The result is fairly in line with expectations. Analysts had predicted a flat reading of 215,000, and taking into account the upward revision of last week’s figures, the flat prediction was accurate. No states were estimated last week.
The predictable stability of the reading bodes well for the labor market which now has an unemployment rate of 3.6%. As initial jobless claims are a leading indicator of layoffs, last week’s figures point to a strong and reliable market. The four-week moving average of claims, a less-volatile measure of layoffs, dropped by 2,500 to 215,000 last week.
The report comes a day ahead of the Labor Department’s May employment report which will be released on Friday. Economists are expecting a non-farm payroll increase of 185,000 in May following the 263,000 increase in April. Continued claims after an initial week of aid rose by 20,000 to 1.68 million for the week ended May 25 and the four-week moving average of these claims dipped 1,000 to 1.67 million.
The pace of job growth is currently well above the 100,000 monthly minimum required to account for growth in the working age population.
First Cut: Initial jobless claims unchanged at 218,000 in June 1 week, in line with recent weeks and consistent with solid labor market. https://t.co/Pg0RdkrlX4 pic.twitter.com/kuHY8mKUfS
— Whetstone Analysis LLC (@AnalysisLlc) June 6, 2019
Labor Market Bolstering Economy
The labor market continues to perform well amid a turbulent economy with volatile sales of exports following a selloff of trade war inventory stockpiles as well as poor performance in manufacturing and housing.
Q2 GDP predictions are below 2%, with the Atlanta Federal Reserve predicting a mere 1.3% pace of growth after the 3.1% seen in Q1. With sub-target inflation readings, a faceoff between the markets and the central bank regarding the need for interest rate cuts, and recessionary indicators on the rise, the strength of the labor market is something of a shining light in an otherwise murky economic future.
Market Reaction
Spot gold prices are up 0.46% at $1,334.42/oz with a high of $1,338.16/oz and a low of $1,327.32/oz. The strength seen in gold prices today is likely a response to a struggling dollar index which has seen selloffs today. Accommodative monetary policies and slowing economic growth worldwide continue to generate interest in safe-haven metals such as gold.
Gold Price Chart
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