12:25 PM EDT, 07/11/2024 (MT Newswires) -- Weekly applications for unemployment insurance in the US declined more than market expectations, government data showed Thursday.

The seasonally adjusted number of initial claims dropped by 17,000 to 222,000 in the week ended July 6, according to the US Department of Labor. The consensus was for a 235,000 level in a survey of analysts compiled by Bloomberg. The previous week's reading was revised up by 1,000 to 239,000.

"Initial claims for unemployment insurance benefits were lower than expected in the week ended July 6, helped by a generous seasonal adjustment factor for the week that included the July 4th holiday," Oxford Economics Lead US Economist Nancy Vanden Houten wrote in a note. "Seasonal factors will make the data noisy for the next three weeks, making it difficult to discern too much from the data."

The four-week moving average came in at 233,500, down 5,250 from the prior week's average, which was revised up by 250. Unadjusted claims increased by 1,666 on a weekly basis to 241,045.

For the week ended June 29, seasonally adjusted continuing claims totaled 1.85 million, below the Bloomberg consensus of about 1.86 million. Continuing claims fell by 4,000 from the previous week's level that was revised down by 2,000. The four-week moving average was about 1.84 million, its highest level since Dec. 4, 2021, gaining 9,750 from the previous week's downwardly revised average, according to the DOL.

New York saw the highest increase in initial claims for the week ended June 29 at 4,427, followed by New Jersey with 2,557 and Georgia with 1,849. The largest drop was in Connecticut, where claims slid by 1,831, followed by Wisconsin and Minnesota.

"The claims data are consistent with a labor market characterized by a slower pace of hiring but still relatively few layoffs," according to Vanden Houten. "The (Federal Reserve) is becoming increasingly focused on downside risks to the labor market and recent inflation data, including this morning's June (consumer price index) release, pave the way for the central bank to start cutting rates in September."

The consumer price index declined 0.1% in June versus a flat reading the month before, according to the Bureau of Labor Statistics. The market was expecting the pace of monthly inflation to accelerate to 0.1%. Annually, inflation slowed down to 3% last month from 3.3% in May.