Weekly Jobless Claims in U.S. Exceed Expectations

Information released Thursday showed that new applications for U.S. unemployment benefits increased more than expected last week, but remained below a level consistent with a healthy labour market.

Data revealed by the U.S. Labor Department said initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 234,000 for the week ended May 19. Claims data for the prior week were revised to show 1,000 more applications received than previously reported.

Economists had forecast claims slipping to 220,000 in the latest week. Claims have held below the 300,000 mark, which is associated with a strong jobs market, for 168 consecutive weeks, the longest such stretch since 1969.

The labour market south of the border is viewed as being close to or at full employment, with the jobless rate near a 7-1/2-year low of 3.9%. The unemployment rate is within striking distance of the Federal Reserve's forecast of 3.8% by the end of this year.

Tightening labour market conditions and rising inflation will likely keep the U.S. central bank on track to increase interest rates next month.

Minutes of the Fed's May 1-2 policy meeting published on Wednesday showed most officials believed "that if incoming information broadly confirmed their current economic outlook, it would likely soon be appropriate ... to take another step in removing policy accommodation."