Tag Archives: Jobs

U.S. private sector adds 178,000 jobs in July: ADP

A sign advertises manufacturing jobs at Ideal Concrete Block Company in Westford, Massachusetts, U.S., July 17, 2017. REUTERS/Brian Snyder

NEW YORK (Reuters) – U.S. private employers added 178,000 jobs in July, below economists’ expectations, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 185,000 jobs, with estimates ranging from 151,000 to 225,000 jobs added.

Private payroll gains in the month earlier were revised up to 191,000 from an originally reported 158,000 increase.

The report is jointly developed with Moody’s Analytics.

The ADP figures come ahead of the U.S. Labor Department’s more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

Economists polled by Reuters are looking for U.S. private payroll employment to have grown by 180,000 jobs in July, down from a gain of 187,000 the month before. Total non-farm employment is expected to have increased by 183,000.

The unemployment rate is forecast to tick down to 4.3 percent from the 4.4 percent recorded a month earlier.

(U.S. Financial Markets Team; Editing by Meredith Mazzilli)

U.S. allows more seasonal workers as Trump pushes ‘hire American’

President Donald Trump looks at Sikorsky helicopters miniature models. "Your drivers are very good," Trump said to a representative of Ping, the Arizona-based maker of golf clubs, noting that he had golfed with British pro golfer Lee Westwood, who is a fan. He discussed sales of Sikorsky helicopters - "I have three of them!" he said, lifted horseshoes made with Nucor Corp steel, and strolled past vacuum-sealed Omaha steaks.

By Doina Chiacu and David Shepardson

WASHINGTON (Reuters) – The U.S. government cleared the way on Monday for thousands more foreign workers to enter the country under temporary seasonal visas, just as President Donald Trump declared this “Made In America” week and pledged to stand up for U.S. workers.

Advocates of stricter limits on immigration criticized the additional visas, saying American workers should get job openings.

Trump, a former New York real estate magnate who has relied on seasonal workers at his hotels and resorts, campaigned on promises to restore American jobs. On Monday, he showcased “Made in America” products at the White House and made an impassioned defense of America First policies.

“We’re going to stand up for our companies and maybe most importantly for our workers,” the Republican president said. “Clearly it’s time for a new policy, one defined by two simple rules: We will buy American. And we will hire American.”

Federal officials said there were not enough qualified and willing American workers available to perform certain types of temporary nonagricultural work.

As a result, the government will allow 15,000 additional visas for temporary seasonal workers, meant to help American businesses in danger of suffering irreparable harm because of a shortage of such labor, the Department of Homeland Security said in a statement.

“As a demonstration of the administration’s commitment to supporting American businesses, DHS is providing this one-time increase to the congressionally set annual cap,” Secretary of Homeland Security John Kelly said in a statement.

Many seasonal businesses such as resorts, landscaping companies and seafood harvesters and processors had sought permission to temporarily hire more immigrants.

Congress originally set the cap at 66,000 workers for the fiscal year ending Sept. 30. In May, lawmakers gave Kelly authority to approve up to an additional 70,000 temporary visas and pleaded with him to use his authority to issue as many of them as he thought appropriate.

Roy Beck, president of NumbersUSA, a group that supports immigration controls, said in a statement the decision “threatens to reverse the trend of reports emerging around the country of employers working harder and raising pay to successfully recruit more unemployed Americans for lower-skilled jobs.”

Beck said it was “yet another example of the administration and Congress failing to keep the Trump campaign promise of putting American workers first.”

‘MINIMAL RELIEF GRANTED’

Trump campaigned on an “America First” platform of favoring Americans for hiring. Trump’s golf resorts in Florida have used the visas, however, to hire temporary guest workers (http://reut.rs/1R4pKma).

The clothing line of the president’s older daughter and adviser, Ivanka Trump, uses foreign factories employing low-wage workers in countries such as Bangladesh, Indonesia and China, a recent Washington Post report showed.

A group of U.S. companies that use the visas, called the “the H-2B Workforce Coalition,” praised the “minimal relief granted.”

It said: “From landscapers in Colorado to innkeepers in Maine to seafood processors along the Gulf Coast to carnivals nationwide, we hope the visa expansion will help some businesses avoid substantial financial loss, and in some cases, prevent early business closures during their peak season.”

A report on Monday by the Economic Policy Institute, a liberal think tank, found, however, there was little evidence of worker shortages in H-2B jobs at the national level.

“Expanding the H-2B program without reforming it to improve protections and increase wages for migrant workers will essentially allow unscrupulous employers to carve out an even larger rights-free zone in the low-wage labor market,” said Daniel Costa, director of immigration law and policy research at the institute.

Kelly has acknowledged that many temporary workers “are victimized when they come up here, in terms of what they’re paid.”

DHS said the government had created a tip line to report any abuse of the visas or employer violations.

(Reporting by Doina Chiacu and David Shepardson in Washington; Additional reporting by Mica Rosenberg in New York; Editing by Marguerita Choy and Peter Cooney)

U.S. job growth seen accelerating; unemployment rate steady

FILE PHOTO: Leaflets lie on a table at a booth at a military veterans' job fair in Carson, California October 3, 2014. REUTERS/Lucy Nicholson/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. employers likely stepped up hiring in June and boosted wages for workers, signs of labor market strength that could keep the Federal Reserve on course for a third interest rate increase this year.

According to a Reuters survey of economists, the Labor Department’s closely watched employment report on Friday will probably show that nonfarm payrolls increased by 179,000 jobs last month after gaining 138,000 in May.

The unemployment rate is forecast steady at a 16-year low of 4.3 percent. It has dropped five-tenths of a percentage point this year and matches the most recent Fed median forecast for 2017.

Economists say labor market buoyancy could also encourage the U.S. central bank to announce plans to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities in September.

“June’s employment report could provide sufficient evidence to Fed officials that they are still positioned to proceed with their monetary policy normalization plans in the second half of the year,” said Sam Bullard, a senior economist at Wells Fargo securities in Charlotte, North Carolina.

The Fed raised its benchmark overnight interest rate in June for the second time this year. But with inflation retreating further below the central bank’s 2 percent target in May, economists expect another rate hike only in December.

June’s anticipated employment gains would be close to the 186,000 monthly average for 2016 and reinforce views that the economy regained speed in the second quarter after a sluggish performance at the start of the year.

But the pace of job growth is expected to slow as the labor market hits full employment. There is growing anecdotal evidence of companies struggling to find qualified workers.

As a result, some companies are raising wages in an effort to attract and retain their workforces. Economists expect worker shortages to boost wage growth, which has remained stubbornly sluggish despite the tightening labor market.

EYES ON WAGES

Average hourly earnings are forecast increasing 0.3 percent in June after gaining 0.2 percent in May. That could lift the year-on-year increase in wages to 2.7 percent from 2.5 percent in May.

“The days of month after month of 200,000 jobs being created are likely behind us,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania.

“We will see trend job growth continue to moderate. That doesn’t necessarily signal that the expansion is running out of juice or that a recession is imminent, it is just a symptom of a full-employment economy.”

The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

Republican President Donald Trump, who inherited a strong job market from the Obama administration, has pledged to sharply boost economic growth and further strengthen the labor market by slashing taxes and cutting regulation.

But Republicans have struggled with healthcare legislation and there are also worries that political scandals could derail the Trump administration’s economic agenda.

Job gains were likely broad in June. Manufacturing payrolls likely rebounded after factories shed 1,000 jobs in May. But employment in the automobile sector probably declined further as slowing sales and bloated inventories force manufacturers to cut back on production.

Ford Motor Co has announced plans to slash 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives. Others, like General Motors are embarking on extended summer assembly plant shutdowns, which will temporarily leave workers unemployed.

Further job gains are likely in construction.

The retail sector is expected to have purged jobs for a fifth straight month as department store operators like J.C. Penney Co Inc, Macy’s Inc and Abercrombie & Fitch struggle against stiff competition from online retailers led by Amazon.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. factory activity jumps, construction spending unchanged

A man walks his dog past a mural depicting factory workers in the historic Pullman neighborhood in Chicago

By Lindsay Dunsmuir

WASHINGTON (Reuters) – U.S. factory activity jumped in June suggesting economic growth in the second quarter gained some steam, while construction spending held steady in May.

The Institute for Supply Management (ISM) said on Monday its index of national factory activity rose to a reading of 57.8 last month from 54.9 in May.

A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for roughly 12 percent of the overall U.S. economy.

The ISM survey’s new orders sub-index rose to 63.5 in June from 59.5 the prior month. A measure of factory employment increased to a reading of 57.2 from 53.5 in May.

According to ISM, comments from those surveyed generally reflected expanding conditions, “with new orders, production, employment, backlog and exports all growing in June compared to May and with supplier deliveries and inventories struggling to keep up with the production pace.” Fifteen of the 18 manufacturing industries reported growth in June.

The dollar rose to a session high against a basket of currencies after the data, while the yield on the 2-year U.S. Treasury note rose to a more than eight-year high. U.S. stocks extended gains.

 

CONSTRUCTION SPENDING MIXED

Meanwhile, U.S. construction spending unexpectedly remained flat in May but federal government outlays on construction projects were the highest in more than four years.

The Commerce Department said on Monday that construction spending in May remained unchanged at $1.23 trillion. Spending in April was revised to show it declining 0.7 percent after a previously reported 1.4 percent fall.

Economists polled by Reuters had forecast construction spending rising 0.3 percent in May. Construction spending increased 4.5 percent from a year ago.

Federal government construction spending jumped 6.4 percent in May to its highest monthly level since January 2013.

The May construction spending release included revisions to data back to January 2015, the Commerce Department said.

In May, private construction spending fell 0.6 percent, the biggest decline since October 2015, after declining 0.2 percent in April. Investment in private residential construction also declined 0.6 percent, the biggest fall since July 2014, after rising 0.5 percent the prior month.

Spending on private nonresidential structures fell 0.7 percent in May, the fifth straight monthly decline.

Investment in public construction projects rose 2.1 percent in May after dropping 2.7 percent in April.

Outlays on state and local government construction projects increased 1.7 percent in May after falling 2.7 percent in April.

 

(Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci)

 

Tech leads Wall Street higher; jobs data falls short

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S.,June 2, 2017.REUTERS/Brendan McDermid

By Chuck Mikolajczak

NEW YORK (Reuters) – U.S. stocks closed at record levels for a second consecutive session on Friday, as gains in technology and industrial stocks more than offset a lukewarm jobs report.

Nonfarm payrolls increased by 138,000 in May, well short of the 185,000 expected by economists. The prior two months were revised lower by 66,000 jobs than previously reported.

Average hourly earnings rose 0.2 percent in May, following a similar gain in April, but the unemployment rate fell to a 16-year low of 4.3 percent.

Despite the disappointing data, market participants still largely anticipate the Federal Reserve to raise rates at its June 13-14 meeting, with traders expecting a 90.7-percent chance of a quarter-point hike, according to Thomson Reuters data.

“It’s certainly surprising. It doesn’t really correlate well with virtually all the other data on the labor market that we’re seeing,” said Russell Price, senior economist at Ameriprise Financial Services Inc in Troy, Michigan.

The modest increase, however, could raise concerns about the economy’s health after gross domestic product growth slowed in the first quarter and a string of softening data this week, including reports on housing and auto sales.

The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population. Job gains are slowing as the labor market nears full employment.

The Dow Jones Industrial Average <.DJI> rose 62.11 points, or 0.29 percent, to 21,206.29, the S&P 500 <.SPX> gained 9.01 points, or 0.37 percent, to 2,439.07 and the Nasdaq Composite <.IXIC> added 58.97 points, or 0.94 percent, to 6,305.80.

For the week, the S&P rose 0.95 percent, the Dow added 0.59 percent and the Nasdaq gained 1.54 percent.

Industrials <.SPLRCI>, up 0.49 percent, and technology <.SPLRCT>, up 1.04 percent, were the best performing sectors. The tech sector has been the top performer among the major S&P sectors, with a 2017 gain of 21.26 percent.

The tech sector was led by Broadcom <AVGO.O>, which rose more than 8 percent to hit an all-time high of $253.76, after the chipmaker’s quarterly results beat analysts’ expectations.

Shares of financials <.SPSY>, which benefit from higher interest rates, fell as much as 0.9 percent after the jobs data sparked some worry the Fed could become cautious after the June meeting, and closed down 0.37 percent.

Energy <.SPNY> was the worst-performing sector, down 1.18 percent. Brent oil tumbled below $50 a barrel on worries that President Donald Trump’s decision to abandon a climate pact could spark more crude drilling in the United States and worsen a global glut.

Lululemon Athletica <LULU.O> jumped 11.5 percent to $54.29 after the athletic apparel maker’s quarterly profit beat estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.34-to-1 ratio; on Nasdaq, a 2.07-to-1 ratio favored advancers.

The S&P 500 posted 28 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 82 new highs and 70 new lows.

About 6.37 billion shares changed hands in U.S. exchanges, compared with the 6.65 billion daily average over the last 20 sessions.

(Additional reporting by Herb Lash; Editing by Nick Zieminski)

Slow U.S. jobs growth takes shine off dollar, stocks hold all-time highs

A U.S. five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

By Vikram Subhedar

LONDON (Reuters) – The dollar retreated slightly after disappointing U.S. jobs growth data on Friday though world stocks clung on to record highs, having gained 11 percent so far this year.

Nonfarm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the Labor Department said on Friday.

While the job gains could still be sufficient for the Federal Reserve to raise interest rates this month, the modest increase could raise concerns about the economy’s health after growth slowed in the first quarter.

“This number is not the kind of report that derails the Fed from raising rates in June,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.

“We’re in a mature phase of the cycle, job growth is going to slow down. The Fed has been talking about this for over a year at this point and they are braced for that reality.”

The dollar index <.DXY>, which measures the greenback’s strength against a basket of major currencies, fell 0.3 percent.

Stock futures on Wall Street trimmed gains slightly and were last trading little changed.

Overnight, data showing a healthy uptick in private sector hiring and factory activity during May bolstered expectations that the U.S. economy was picking up speed and lifted U.S. stocks after two days of losses.

Those gains filtered through to global stocks, lifting the MSCI All-Country World index <.MIWD00000PUS> 0.4 percent to a record high and on track to post a seventh straight week of gains, the longest such run since 2010.

Stocks in Europe joined the party with German bluechips powering ahead to a record, up 1.6 percent. The UK’s FTSE 100 <.FTSE> also hovered near its highest-ever levels rose 0.4 percent.

So far this year investors have pumped $140 billion globally into stock funds, according to fund flow data from Bank of America Merrill Lynch and EPFR showed on Friday.

Global equities attracted $13.7 billion in the latest week to Wednesday, the largest inflows in five weeks, as investors loaded up on risk.

In commodities, however, oil prices resumed their slide with key futures contracts down more than 2 percent amid worries that U.S. President Donald Trump’s decision to abandon a global climate pact could spark more crude drilling in the United States, stoking a persistent glut in global supply.

Global benchmark Brent crude futures <LCOc1> fell to $49.63 a barrel, while U.S. West Texas Intermediate crude <CLc1> by more than a dollar to $47.36 per barrel.

(Reporting by Vikram Subhedar; Editing by Hugh Lawson and Keith Weir)

Hundreds protest over minimum wage at McDonald’s stockholder meeting

Cooks, cashiers and other minimum wage earners join anti-Trump activists on a march for an increase in the minimum wage to $15/hour during a “March on McDonald’s” in Oak Brook, Illinois, U.S., May 24, 2017. REUTERS/Frank Polich

By Bob Chiarito

OAK BROOK, Ill. (Reuters) – Hundreds of fast-food workers demanded wage increases as they marched outside McDonald’s Corp <MCD.N> headquarters during the company’s annual shareholder meeting on Wednesday.

The demonstrators were part of a nationwide protest organized by “Fight for 15,” a labor group that has regularly targeted McDonald’s in calls for higher pay and union rights for workers.

More than two dozen protesters were arrested outside the United Continental Holdings Inc <UAL.N> shareholder meeting in downtown Chicago.

“I saw my mother, who worked 30 years for Hardee’s, struggle on food stamps to raise her family and now I’m doing the same thing,” said Terrance Wise, a 42-year-old from Kansas City, protesting outside the McDonald’s meeting in a Chicago suburb.

Wise, who has worked at McDonald’s for three years, said he earns $7.65 an hour working full time. He said he also relies on food stamps to support his three daughters.

“Instead of paying their CEO $15 million, they should give him $10 million and pay their workers what’s right,” he said. The main demand of “The Fight for 15” is a minimum wage of $15 an hour.

Chief Executive Officer Steve Easterbrook earned $15.3 million in total compensation last year, according to company data.

Shareholders inside the McDonald’s meeting did not ask about the protests during a question-and-answer session.

Easterbrook focused on the fast-food giant’s plans for delivering food with UberEats and the rollout of new products.

The company says it invests in its workers by helping them to earn college degrees and acquire on-the-job skills. In 2015, the company raised the average hourly pay to around $10 for workers in the restaurants it owns.

However, most McDonald’s workers in the United States are employed by franchisees who set their own wages.

Hopes for an increase in the $7.25-per-hour federal minimum wage were dashed last year when Republicans retained control of Congress in the U.S. elections last November. Opponents of an increase say higher costs would force restaurants to cut hiring, and some businesses would not survive.

Still, voters in Arizona, Colorado, Maine and Washington have approved minimum wage increases in their states, encouraging advocates to continue pressing their case at the local level. Workers on Wednesday also gathered outside of a McDonald’s store near downtown Los Angeles.

In Chicago, 30 protesters outside the United Continental meeting were arrested and cited for blocking a road, Chicago police said.

More than 100 protesters were arrested during nationwide demonstrations several weeks after Donald Trump won the White House in November. At various times on the campaign trail, Trump suggested U.S. workers were overpaid, but also that the minimum wage should be raised.

(Additional reporting by Anya George Tharakan in Bengaluru and Lucy Nicholson in Los Angeles; Writing by Timothy Mclaughlin in Chicago; Editing by Frances Kerry and Jeffrey Benkoe)

U.S. jobless claims fall; continuing claims at 28-1/2-year low

FILE PHOTO: Job seekers speak with potential employers at a City of Boston Neighborhood Career Fair on May Day in Boston, Massachusetts, U.S., May 1, 2017. REUTERS/Brian Snyder

WASHINGTON – New applications for U.S. jobless benefits unexpectedly fell last week and the number of Americans receiving unemployment aid hit a 28-1/2-year low, pointing to rapidly shrinking labor market slack.

Initial claims for state unemployment benefits decreased 4,000 to a seasonally adjusted 232,000 for the week ended May 13, the Labor Department said on Thursday. That pushed claims close to levels last seen in 1973.

Data for the prior week was unrevised and claims have now decreased for three consecutive weeks. Economists polled by

Reuters had forecast first-time applications for jobless benefits rising to 240,000.

Claims have now been below 300,000, a threshold associated with a healthy labor market, for 115 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller. The labor market is close to full employment, with the

unemployment rate at a 10-year low of 4.4 percent.

A Labor Department official said there were no special factors influencing last week’s data and only claims for Louisiana had been estimated.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,750 to 240,750 last week, the lowest level since February.

Last week’s claims data covered the survey week for May’s nonfarm payrolls. The four-week average of claims fell 2,000 between the April and May survey periods suggesting further job gains this month. The economy created 211,000 job in April after

adding only 79,000 positions in March.

Labor market strength and tightening could allow the Federal Reserve to raise interest rates next month.

Expectations of a June rate hike have also been supported by data such as retail sales and industrial production, which suggested that economic growth picked up early in the second quarter after rising at an anemic 0.7 percent annualized rate in

the first quarter.

The U.S. central bank increased its benchmark overnight interest rate by 25 basis points in March and has forecast two more increases this year.

Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid dropped 22,000 to 1.90 million in the week ended May 6, the lowest level since November 1988.

The so-called continuing claims have remained below 2 million for five straight week. The four-week moving average of continuing claims declined 20,000 to 1.95 million, the lowest level since January 1974.

((Reporting by Lucia Mutikani; Editing by Paul Simao))

Following advice, potential FBI chiefs steer clear of job under Trump

FILE PHOTO: People protest against President Donald Trump's firing of FBI Director James Comey, on Trump's star on the Hollywood Walk of Fame in Los Angeles, California, U.S. May 12, 2017. REUTERS/Lucy Nicholson

By Julia Edwards Ainsley

WASHINGTON (Reuters) – The Trump administration’s search for a new FBI director hit roadblocks on Tuesday when two high-profile potential candidates, a moderate judge and a conservative senator, signaled they did not want the job.

Advisers to Judge Merrick Garland and U.S. Senator John Cornyn of Texas told Reuters they discouraged them from leading the Federal Bureau of Investigation, cautioning that they would be leaving important, secure jobs for one fraught with politics and controversy.

The advisers, who spoke on the condition of anonymity, said the new FBI director would have little job security and heightened scrutiny by political observers following President Donald Trump’s abrupt firing of James Comey on May 9.

Garland and Cornyn distancing themselves from the selection process just three days before Trump has said he may make a decision, points to the difficulties the White House has in filling the FBI post amid turmoil in the administration.

Trump’s firing of Comey, the man in charge of an investigation into possible collusion between 2016 election campaign associates and the Russian government, outraged many lawmakers, including some Republicans.

Garland, the chief judge of the U.S. Court of Appeals for the District of Columbia Circuit, “loves his job and is not interested in leaving the judiciary,” said one source familiar with the judge’s thinking.

Cornyn said in a statement that he had informed the White House that “the best way I can serve is continuing to fight for a conservative agenda in the U.S. Senate.”

White House spokesman Sean Spicer told reporters on Tuesday that an announcement on FBI director was still possible before Trump leaves on his first foreign trip on Friday. He said the U.S. Department of Justice was still interviewing candidates.

Several Republican senators had promoted Garland even though they had refused to give him a hearing when Republican Trump’s predecessor President Barack Obama, a Democrat, nominated Garland last year for a then-vacant seat on the U.S. Supreme Court. The Republicans’ reasoning appeared to be that Garland would be accepted by Democrats and help restore faith in the FBI as a nonpartisan agency.

In an interview on Bloomberg Television, Republican Senate Majority Leader Mitch McConnell referred to Garland, a former federal prosecutor, as “an apolitical professional.”

A second Garland acquaintance who spoke on the condition of anonymity said Garland sought advice from those who told him he would be leaving his life-long position on the federal bench to take a job that could be terminated by Trump overnight.

A Republican Senate aide said Cornyn’s staff also worried that the third-term Texas Senator could cut his- and their own- careers short by going to the FBI.

An adviser to another candidate on the White House short-list, former New York City Police Commissioner Ray Kelly, 75, said Kelly is also being persuaded to step out of the running.

Kelly has not said that he would not consider the job, but so far he has not been interviewed.

Republican Representative Trey Gowdy, a former federal prosecutor whose name had been floated, said on Monday he was not interested in the director position.

The difficulty in filling key administration jobs is not just limited to the FBI director post.

Trump’s habits of contradicting his top aides, demanding personal loyalty and punishing officials who contradict him in public has discouraged a number of experienced people from pursuing jobs, said three people who declined to discuss possible positions with administration officials.

“It’s becoming increasingly difficult to attract good people to work in this administration,” said one senior official. “In other cases, veteran people with expertise are leaving or seeking posts overseas and away from this White House.”

(Reporting by Julia Edwards Ainsley, additional reporting by Lawrence Hurley, Mark Hosenball, Richard Cowan and Steve Holland; editing by Grant McCool)

U.S. jobless claims fall; continuing claims lowest since 1988

FILE PHOTO: A "Now Hiring" sign hangs on the door to the Urban Outfitters store at Quincy Market in Boston, Massachusetts September 5, 2014. REUTERS/Brian Snyder

WASHINGTON – New applications for U.S. jobless benefits unexpectedly fell last week and the number of Americans on unemployment rolls hit a 28-1/2-year low, pointing to a rapidly tightening labor market that could encourage the Federal Reserve to raise interest rates in June.

Initial claims for state unemployment benefits dropped 2,000 to a seasonally adjusted 236,000 for the week ended May 6, the Labor Department said on Thursday. Claims for the prior week were unrevised.

Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 245,000.

Claims have now been below 300,000, a threshold associated with a healthy labor market, for 114 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller. The labor market is close to full employment, with the

unemployment rate at a near 10-year low of 4.4 percent.

Labor market strength, also marked by a sharp rebound in job growth in April, has left financial markets anticipating further monetary policy tightening from the Fed in June.

The U.S. central bank increased its benchmark overnight interest rate by 25 basis points in March and has forecast two more rate hikes this year. The economy created 211,000 job in April after adding only 79,000 positions in March.

A Labor Department official said there were no special factors influencing last week’s data and only claims for Louisiana had been estimated.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 500 to 243,500 last week.

Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid tumbled 61,000 to 1.92 million in the week ended April 29, the lowest level since November 1988.

The four-week moving average of the so-called continuing claims fell 27,500 to 1.97 million, the lowest level since February 1974.

((Reporting By Lucia Mutikani; Editing by Andrea Ricci))