There was more welcome news for the U.S. labor market with the earlier release of initial claims data, which fell further than any economist included in the Bloomberg Survey had projected.
The headline reading of claims at 284,000 was the lowest since February 2006 and helped drag down the four-week moving average to 302,000 and its lowest reading since May 2007. And while the Labor Department noted no unusual circumstances, the onset of summer brings annual auto-plant closures for retooling.
The timing of closures creates gyrations in the data series, making it awkward for the government to get a true read on the number of claimants. States hosting major auto plants were among those showing the largest dip in weekly claimants through last weekend, suggesting layoffs may have yet to kick-in as car manufacturers stretch hours to meet strong demand.
Having mentioned the auto-plant caveat, the claimant data continues to depict a strengthening labor market. The reading of continuing claims fell to 2.5mm, lower by 8,000 and the fewest since June 2007.
Chart: Question over timing of annual auto-plant closures remains.