Weekly US jobless claims hit new cycle low

First time jobless claims in the US retreated to their lowest level since March 2020, in a further sign of the challenges faced by companies to retain workers.

According to the Department of Labor, initial unemployment claims fell by 51,000 to 364,000 over the week ending on 26 June.

Economists had penciled-in a reading of 410,000.

Three weeks before, initial jobless claims had fallen to 374,000 before bouncing back a little.

Due to the surprising scarcity of labour, firms in the US have been reticent to let workers go.

Nevertheless, secondary unemployment claims, which are those not being filed for the first time and referencing the week ending on 19 June, edged up by 56,000 to 3.469m.

Secondary jobless claims are more closely linked to hiring, as opposed to first time claims which correlate with firings.

"It’s possible, then, that the recent data signal a slowing in the trend rate of decline in claims, but these numbers are noisy and we aren’t going to rush to judgment on the back of such a short run of data," said Ian Shepherdson, chief US economist at Pantheon Macroeconomics.

Shepherdson also cautioned that, as was the case each year, the claims data until the end of July would be distorted due to the rolling shutdowns across the US automobile industry.