Jobless Claims in U.S. Lower than Expected

New applications for U.S. unemployment benefits unexpectedly fell last week and the number of Americans on jobless rolls declined to more than a 44-year low, pointing to a rapidly tightening labour market.

Figures released Thursday by the U.S. Labor Department reported initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 218,000 for the week ended June 9. Claims data for the prior week was unrevised.

Economists had forecast claims rising to 224,000 in the latest week. But the four-week moving average of initial claims, viewed as a better measure of labour market trends as it irons out week-to-week volatility, fell 1,250 to 224,250 last week.

The labour market is considered to be close to or at full employment, with the jobless rate at an 18-year low of 3.8%. The unemployment rate has dropped by three-10ths of a percentage point this year. It is near the Federal Reserve's forecast of 3.6% by the end of this year.