U.S. jobless claims fall by 11,000 last week

The numbers: New U.S. jobless claims fell by 11,000 to 200,000 last week, reflecting the lowest layoffs on record and the strongest labor market in decades.

Economists polled by the Wall Street Journal predicted initial jobless claims to total 210,000 in the seven days ended May 28. The figures are seasonally adjusted.

Applications for unemployment benefits have fallen two weeks in a row after rising to a four-month high in early May.

The new filings fell to a 54 year low of 166,000 in March and have hovered near 200,000 since the beginning of the year, government figures show.

Good help is in short supply, despite the tightest labor market in decades, but there are signs of a slight softening.

For example, job openings have fallen from a record high, and the Fed s Beige Book said some companies have put in place hiring freezes because of concerns about a recession.

There is little sign of businesses shedding jobs after the U.S. layoffs hit a record low. Layoffs usually start to rise before a recession.

The most raw, or unadjusted, jobless claims fell in Kentucky, Pennsylvania, Georgia and Florida.

California and Mississippi were the only states to see sizable increases.

The number of people who are already receiving unemployment benefits fell by 34,000 to 1.31 million in the week ending May 21. These continuing claims are still at the lowest level since 1969.

With job openings still elevated and layoffs at a record low, we expect initial claims to remain at current levels even though demand for workers starts to slow down, said Nancy Vanden Houten, lead U.S. economist at Oxford Economics.

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open higher in Thursday trades.

Over the past week, the Dow has rallied on the possibility that the Fed might not raise interest rates as quickly as Wall Street had expected.