-Challenger, Gray & Christmas CEO John Challenger
The closely-watched labour market is showing signs of stabilization as the number of Americans who applied last week for the jobless benefits fell, however, a modest decline is pointing to small change in the U.S. labour market, which is still struggling to generate new work places. According to data provided by the Labor Department, initial jobless claims dropped by 11,000 to a seasonally adjusted 346,000 in the week ended June 1. Economists, however, expected a slightly bigger drop of 12,000. At the same time, the less-volatile four-week moving average rose by 4,500 to 352,500, hitting the highest level in six weeks.
Even though, unemployment claims have been volatile during recent weeks, there is little in the numbers that suggests a shift in the moderate pace of job gains, even as the economy itself was affected by recent budget cuts and tax hikes. The world's largest economy added an average of 152,000 jobs in March and April, down sharply from a 237,000 monthly rate from November through February.
In the meantime, economists do not expect much improvement in May. The U.S. is likely to have added a net 172,000 jobs last month, while the unemployment rate will hold steady at 7.5%.
© Dukascopy Bank SA