US initial jobless claims drop more than expected

The number of Americans filing for unemployment benefits fell more than expected last week, according to data from the Labor Department.

US initial jobless claims were down 8,000 to 237,000 from the previous week's unrevised level of 245,000. Economists had been expecting a smaller drop to 242,000.

Meanwhile, the four-week moving average came in at 243,000, up 1,000 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 the data was strongly supportive of the idea that the relatively high readings for the past couple of weeks were due to Memorial Day seasonal adjustment problems rather than a change in the underlying picture. "The trend is below 240,000, signalling a very tight labour market," it said.