US weekly jobless claims decline below 500,000; mid-Atlantic factory activity cools

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US weekly jobless claims decline below 500,000; mid-Atlantic factory activity cools

On Thursday, US Labour Department said that the number of Americans filing for first-time state unemployment claims fell further below 500,000 last week, however, an increase in unemployment rate reported on early-May could tone down hopes of an acceleration in employment growth this month, suggested analysts.

Apart from that, other Government data released earlier on the day had unveiled that a gauge of factory activity in the mid-Atlantic region tumbled this month with businesses based on eastern Pennsylvania, Delaware and Southern New Jersey increasing working hours, suggesting further exacerbation of a chronic labour shortage, as a persistent supply chain disruption appeared to be tempering factory output in the region.

US weekly jobless claims fall, uplifts Wall Street

According to US Labour Department data released earlier in the day, the number of Americans applying for state unemployment benefits for the first time on their lives fell 34,000 to a seasonally adjusted 444,000 in the week that ended on May 15, the lowest reading since mid-March 2020, when the US economy nearly stalled due to the first wave of pandemic outbreak.

Nonetheless, despite a steady decline in weekly jobless claims over recent past, initial claims remained well above a range between 200,000 to 250,000, which is widely contemplated as a healthy labour market. More importantly, jobless claims would likely to drop further this week as Republican Governors from at least 21 US States had decided to withdraw the unemployment benefit programs funded by federal Government citing that an additional $300 per week in jobless benefits were discouraging people to seek works.

Meanwhile, addressing to a drop in layoffs last week, a senior economic advisor at Brean Capital in New York, Conrad DeQuadros said, “If the data are taken at face value, it would suggest both a reduction in layoffs and a slowing in hiring, which given the rising level of labor demand could only be explained by a reduction in labor supply”.

Wall St. snapped a three-session-long losing run followed by the release of upbeat jobless claims data.