WASHINGTON, June 18 (Reuters) - The number of Americans filing claims for unemployment benefits fell last week, but remained at slightly higher levels, suggesting some moderation in the pace of job growth in June.

Economists largely shrugged off the report from the Labor Department on Thursday, with some pointing out that the recent elevation in claims was likely due to seasonal distortions related to the end of the school year. They viewed the labor market as remaining stable enough for the Federal Reserve to focus on stamping out inflation, stoked by the Iran war.

The U.S. central bank on Wednesday kept its benchmark overnight interest rate in the 3.50%-3.75% range, but updated quarterly projections showed policymakers expected to raise borrowing costs this year amid growing concerns about inflation.

"We don't expect claims to trend consistently higher from here," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics. "And despite the bounce off the recent lows, the level of initial claims is still consistent with a broad range of labor market indicators that show the job market has improved but isn't overheating. That will allow the Fed to keep policy on hold while it waits for inflation to come down."

Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 226,000 for the week ended June 13, the Labor Department said. Economists polled by Reuters had forecast 225,000 claims for the latest week. Claims had increased for three straight weeks, pushing to the upper end of their 190,000-230,000 range for this year.

Last week, there were notable increases in unadjusted claims in Oregon and Minnesota, among the few states that allow non-teaching staff to file for unemployment benefits during the months-long school holidays. Seasonal factors, the model used by the government to strip out seasonal fluctuations from the data, do not always capture these moves.

Claims in Pennsylvania rose 3,734 last week after surging 5,381 in the prior week, an increase that was attributed to layoffs in transportation and warehousing, administrative and support and waste management and remediation services industries as well as in accommodation and food services, healthcare and social assistance.

The labor market has regained momentum, posting three straight months of strong job gains, after wobbling in 2025. Lower layoffs have kept the unemployment rate at 4.3% for three consecutive months.

Fed Chair Kevin Warsh told reporters on Wednesday that members of the U.S. central bank's policy-setting committee "thought that the labor markets were stable," and "there were some people around the committee who thought that it was trending better than that." Warsh added, "I'd say the jobs data has been moving in a good direction."

Stocks on Wall Street rose. The dollar hit a record high against a basket of currencies. U.S. Treasury yields fell.

REGIONAL FACTORY ACTIVITY REBOUNDS

The claims data covered the period during which the government surveyed businesses and other establishments for the nonfarm payrolls component of June's employment report. Claims increased by 16,000 between the May and June survey weeks.

"That hints at some potential slowing in June job creation," said John Ryding, senior economic advisor at Brean Capital. "However, if we are looking at the broader trend, which Chair Warsh wants to do, there is little evidence of a change in the mean-reverting statistical process that has described weekly jobless claims."

Nonfarm payrolls increased by 172,000 jobs in May. Part of the strength in job growth is likely from low layoffs as some business surveys have shown weakness in employment measures.

Economists say policy uncertainty, including import tariffs last year and now the Middle East conflict, is constraining hiring.

The U.S. and Iran have signed a ceasefire agreement, further pushing oil prices lower. Though oil prices have dropped from multi-year highs, economists said it could take a while for inflation to finally subside.

A separate survey from the Philadelphia Fed on Thursday showed business activity in the Mid-Atlantic region rebounded in June, though a measure of prices paid by factories for inputs increased. Businesses anticipated receiving higher prices over the next six months.

"The expected prices received measure is now at the highest level since the summer of 2021 and within a few points of the pandemic-era peak," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.

"If this measure rises by two more points, we will be talking about the highest reading since the early 1980s. This certainly offers a troubling picture for the Fed and its newly intensified determination to hit the 2% inflation target."

Though the survey's measure of factory jobs swung to positive territory this month, "most firms continued to report no changes in employment overall." The lack of hiring was evident in the weekly claims report. The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 24,000 to a seasonally adjusted 1.81 million during the week ended June 6, the claims report showed.

The increase in the so-called continuing claims was partly due to the rise in filings in Minnesota and also aligned with data showing many unemployed people are experiencing long bouts of joblessness. The median duration of unemployment jumped to 11.6 weeks in May, the longest stretch since November 2021, from 11.0 weeks in April, the government reported this month.

"We continue to expect weaker job growth and higher unemployment rates in the summer months," said Gisela Young, an economist at Citigroup.