First-time claims for U.S. unemployment benefits showed a modest decrease in the week ended June 5th, according to a report released by the Labor Department on Thursday.
The report showed initial jobless claims edged down to 376,000, a decrease of 9,000 from the previous week's unrevised level of 385,000. Economists had expected jobless claims to dip to 370,000.
With the slight drop, jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.
The less volatile four-week moving average also dropped to its lowest level in over a year, falling by 25,500 to 402,500 from the previous week's unrevised average of 428,000.
Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also tumbled by 258,000 to 3.499 million in the week ended May 29th.
With the steep drop, continuing claims fell to their lowest level since hitting 3.094 million in the week ended March 21, 2020.
The four-week moving average of continuing claims also fell to a more than one-year low of 3,651,250, a decrease of 35,250 from the previous week's revised average of 3,686,500.
"The latest drop in continuing claims reminds us that a recovery in hiring is on track although it may occur at an uneven and gradual pace as constraints on labor supply are resolved," said Nancy Vanden Houten, Lead Economist at Oxford Economics.
Last Friday, the Labor Department released a separate report showing U.S. job growth reaccelerated in the month of May but still fell short of economist estimates.
The report said non-farm payroll employment jumped by 559,000 jobs in May after climbing by an upwardly revised 278,000 jobs in April.
Economists had expected employment to surge by 650,000 jobs compared to the addition of 266,000 jobs originally reported for the previous month.
Employment in the leisure and hospitality sector showed another significant increase, spiking by 292,000 jobs during the month. Notable job growth was also seen in public and private education and health care and social assistance.
The Labor Department also said the unemployment rate fell to 5.8 percent in May from 6.1 percent in April, while economists had expected the unemployment rate to dip to 5.9 percent.
With the bigger than expected decrease, the unemployment rate dropped to its lowest level since hitting 4.4 percent in March of 2020.