The number of first-time claims for jobless benefits dropped in the latest week to a level that suggests job growth may be returning to a level that will bring down the unemployment rate, according to Reuters. On Thursday, the Labor Department reported that initial claims for state unemployment benefits were down by 29,000 in the week ending May 7 from the previous week, moving to a seasonally adjusted level of 409,000. The drop was larger than the 14,000-claim decrease that economists had expected, and slowed the rate of growth of the four-week average new claim average, which inched up by 1,250 to 439,000 to mark the highest level since November.
Despite the four-week average reaching a fresh high, Neil Dutta of Bank of America Merrill Lynch said of the report, “Clearly what it shows is an ongoing healing in the labor market.” He continued to point out that some of the recent uptick in claims has been “skewed by special factors like the Easter holiday and supply chain issues coming out of Japan.” The level of new claims remained above 400,000 for the sixth week in a row, but the return to roughly that level indicates that gradual labor market growth is likely to have resumed.