WASHINGTON (Reuters) -The number of Americans filing new claims for jobs benefits fell more than expected last week, with applications in Massachusetts decreasing sharply, suggesting the labor market remains tight.
The steep decline in weekly unemployment claims reported by the Labor Department on Thursday reversed the surge in the prior week, which had boosted them to the highest level since Oct. 30, 2021. That increase was largely blamed on an unusual jump in applications for unemployment insurance in Massachusetts.
The state’s Department of Unemployment Assistance said last week it was “experiencing an increase in fraudulent claim activities in which people attempted to gain access to active UI accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits.”
Initial claims for state unemployment benefits dropped 22,000 to a seasonally adjusted 242,000 for the week ended May 13. Economists polled by Reuters had forecast 254,000 for the latest week.
Unadjusted claims dropped 18,605 to 215,810 last week, with filings in Massachusetts plunging by 14,042. Claims also fell considerably in Missouri and New Jersey, more than offsetting notable increases in Ohio and Illinois.
The labor market is being closely watched for signs of stress from the Federal Reserve’s fastest interest rate hiking campaign since the 1980s.
Though it has shown some signs of cooling, the labor market has remained tight, with 1.6 job openings for every unemployed person in March, well above the 1.0-1.2 range that is consistent with a jobs market that is not generating too much inflation.
The claims report covered the period during which the government surveyed business establishments for the nonfarm payrolls portion of May’s employment report.
Claims were little changed between the April and May survey weeks. The economy created 253,000 jobs in April, with the unemployment rate falling back to a 53-year low of 3.4%.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 8,000 to 1.799 million during the week ending May 6, the lowest level since early March, the claims report showed.
The so-called continuing claims remain low by historical standards as some unemployed people find new work quickly.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)
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