US unemployment claims drop sharply

Applications for unemployment benefits in the U.S. fell by the most since October 2021 last week. Applications for unemployment benefits in the U.S. fell by 26,000 to 239,000 in the week ending June 24, which includes the holiday. The figure fell short of all estimates in a Bloomberg survey of economists. Continuing claims, which include those who have been receiving unemployment benefits for more than a week, fell to 1.7 million in the week ending June 17. Despite the decline in jobless claims, labor demand is slowly easing as the Fed’s year-long history of rate hikes has taken its toll on the economy. Chairman Jerome Powell said this week that the labor market is cooling as the central bank hopes and that if it continues, it could limit job losses. Unemployment claims data can fluctuate from week to week, especially during the holiday season. The four-week moving average of initial claims, which smooths out some of this volatility, rose to 257,500, reaching the highest level since the end of 2021.