Applications for US jobless aid fell to 3-month low of 232K

US initial jobless claims continue to fall in May data supportive of employment growth

US initial jobless claims continue to fall in May data supportive of employment growth

Initial benefit filings decreased by 4,000 to 232,000, the lowest since late February. That pushed claims close to levels last seen in 1973.

Claims have now decreased for three consecutive weeks.

Applications for unemployment benefits have registered less than 300,000 for 115 straight weeks, the longest run since the early 1970s. The figure has fallen 12 percent in the past year.

Continuing claims declined once again to 1.898mn for the week ending May 6th from a revised 1.920mn the previous week and this was the lowest reading since November 1988. Data on continuing claims are released with a one-week lag. This year, the job gains have averaged 185,000 a month - the same pace as in 2016. The economy created 211,000 jobs in April after adding only 79,000 positions in March. 13, the Labor Department said on Thursday.

To get out ahead of possible inflation, the Federal Reserve has raised its benchmark interest rates twice since December and forecasts another two increases this year.

KEY DRIVERS: Hiring has remained steady, despite the first quarter's slow growth.

But a stock market sell-off, if sustained, amid uncertainty over Trump's political future could jeopardize further rate increases.

Financial markets are pricing in a 60 percent chance of a 25-basis-point hike at the Fed's June meeting, down from 78.5 percent on Tuesday, according to CME Group's FedWatch program. In addition, a gauge of future US economic activity rose again in April.

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