US initial jobless claims fall less than expected

US initial jobless claims were down 10,000 to 245,000 from the previous week's level, which was revised up by 7,000. Economists had been expecting a bigger drop to 240,000.

Meanwhile, the four-week moving average came in at 242,000, up 2,250 from the previous week's level, which was revised up by 1,750 to 239,750.

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 upturn in claims in the past two weeks appears to be the result of seasonal adjustment problems around Memorial Day. Over the next couple of weeks the seasonals look much more favourable, and we expect claims to drop back into the 230s, perhaps hitting new cycle lows. With labour demand so high - all the recent hiring surveys have been very strong - and unemployment so low, firms are reluctant to let people go unless they have no choice. We see no reason for this to change anytime soon."