Jobless Claims Fall To 239,000, Confounding Federal Reserve’s Campaign to Soften Labor Market

Initial jobless claims unexpectedly plunged by 26,000 last week to a seasonally adjusted 239,000, the Labor Department said Thursday.

New claims for unemployment benefits are a proxy for layoffs. They had been trending higher for several weeks and were expected to continue climb in the latest data. The consensus forecast for the week was 275,000.

Continuing claims, which are reported with a one-week delay, also fell. These dropped by 19,000 to 1,742,000, a historically low level and an indication that many of those who have lost their jobs in recent months are quickly finding new work.

The four-week moving average of initial claims, which smooths out often volatile weekly numbers, edged up to 257,500 from 265,000.

The ongoing strength of the labor market suggests that the Federal Reserve still has more work to do to bring down inflation.