US jobless claims tick higher; GDP grows 6.6% in Q2

The number of Americans filing for unemployment benefits rose a little more than expected last week but remained near a pandemic low, according to figures released by the Labor Department on Thursday.

US initial jobless claims pushed up by 4,000 to 353,000 from the previous week’s level, which was revised up by 1,000. Analysts had expected a level of 350,000.

Meanwhile, the four-week moving average fell by 11,500 from the previous week’s level, which was revised up by 250. This marked the lowest level for this average since March 14, 2020 when it was 225,500.

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.

Meanwhile, continuing jobless claims declined by 3,000 from the previous week to 2.86m.

Separate data from the Commerce Department showed that US GDP rose at an annualised pace of 6.6% in the second quarter, coming in ahead of an initial estimate of 6.5% but a touch below analysts’ expectations for 6.7% growth. This follows 6.3% growth in the previous quarter.

Pantheon Macroeconomics said: "A repeat of last week’s 28K drop was never in the cards; the seasonals were much less friendly this week.

"The downward trend in claims continues, despite the Covid Delta wave, presumably because the bar to letting staff go is very high, given the tightness of the labour market. Firms can’t be sure they’ll be able to re-hire people laid off now. The labour market hit from Delta, therefore, is more likely to come on the hiring side; claims have nothing to say about that."