Initial jobless claims unexpectedly drop

The number of Americans filing for unemployment benefits unexpectedly fell last week, according to the Labor Department.

US initial jobless claims fell by 1,000 to 267,000, versus expectations for an increase to 270,000.

This marked 65 consecutive weeks of initial claims below 300,000 - the longest streak since 1973.

Meanwhile, the four-week moving average of new claims came in at 276,750, down 1,750 from the previous week’s unrevised average.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Pantheon Macroeconomics said: "Now that the sustained distortions caused by the early Easter have faded from the numbers, the underlying trend has re-emerged close to 270K, an all-time low when adjusted for population growth. The next report could surprise thanks to Memorial Day seasonal issues and the annual auto retooling shutdowns in late June/early July can trigger temporary volatility too, but the key point here is that nothing much is happening to claims.

"They are extremely low and consistent still with sustained 200K-plus payroll gains, though the Verizon strike will constrain tomorrow's report. But if the Fed wants to see continued improvement in the labour market, these data are part of that story."