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(Kitco News) -
The U.S. labor market is showing signs of stabilization as applications for first-time unemployment benefits dropped further than market expectations, sparking a selloff in gold.
Thursday, the U.S. Labor Department said that weekly jobless claims fell by 22,000 to 242,000 for the week ending May 13, down from the previous week's unrevised level of 264,000 claims.
The previous week’s number was the highest level for initial claims since October 30, 2021.
The latest labor market data was significantly better than expectations. According to consensus forecasts, economists were predicting initial claims to fall to 254,000, but Thursday’s data more than doubled the expected drop.
Gold prices fell sharply in the wake of the better-than-expected employment data, dropping from $1974.09 just before the release to session lows of $1966.16 at the time of writing.
The four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it flattens week-to-week volatility – fell to 244,250, a decrease of 1,000 claims from the previous week's unrevised average of 245,250.
Continuing jobless claims, which represent the number of people already receiving benefits, were at 1.799 million during the week ending May 6, decreasing by 8,000 from the previous week's revised level of 1.807 million.
