Initial unemployment claims tick up, long-term claims drop

The US Labor Department released unemployment insurance claims data for the week ending 20 May which showed a slight increase of 4,000 in the number of first-time claims rising to 229,000. Economists polled by Reuters had predicted the number to be 245,000.

Data for the previous two weeks was revised down sharply as fraudulent applications from Massachusetts were stripped out. In early May the Massachusetts Department of Unemployment Assistance sounded the alarm that it was “experiencing an increase in fraudulent claim activities” from people attempting to gain access to current UI accounts as well as individuals using stolen personal data to fraudulently obtain unemployment benefits.

Strength in the US labor market was further indicated by a reduction of over 48,000 continuing UI claims suggesting another month of strong employment gains and a lower jobless rate. Jobs growth data for May is due out on Friday 2 June. The Federal Reserve will be watching the incoming economic data closely as they weigh whether to implement another interest rate hike or not at their next meeting 13 and 14 June.