The 4k U.S. initial claims drop to 218k
The 4k U.S. initial claims drop to 218k in the second week of June, after a 1k down-tick to 222k, leaves a 4-week decline from a 7-week high of 234k as the measure oscillates just above the 48-year low of 209k in late-April. Claims are oscillating around tight levels, with a modest downtrend that keeps new multi-decade lows in reach. Claims are averaging just 219k in June, versus similar averages of 223k in May and 221k in April, and higher prior averages of 228k in March and 224k in February. Next week's June BLS survey week reading looks poised to undershoot recent readings of 223k in May, 233k in April, and 227k in March, versus a particularly low 218k in February. Continuing claims plunged 49k to a remarkably tight 1,697k new cycle-low at the start of June, versus a 1,712k prior cycle-low at the start of May. Analysts previously saw a much higher 1,794 cycle-low in the fourth week of April. Our 200k June nonfarm payroll estimate lies below the 223k May gain, but between the 207k year-to-date average and the 197k average increase over the past 12 months. Payrolls again face upside risk from a tight path for claims and robust consumer, producer, and small business confidence.