WASHINGTON—The number of Americans seeking unemployment benefits fell sharply last week, a sign layoffs are stabilizing after touching a 15-month high.

Initial jobless claims, a measure of layoffs throughout the U.S., declined by 16,000 to a seasonally adjusted 278,000 in the week ended May 14, the Labor Department said Thursday. It was the largest one-week drop since early February, but also the first time claims declined in four weeks.

Economists surveyed by The Wall Street Journal had expected 272,000 new claims.

Claims for the May 7 were unrevised 294,000. Claims last week spiked to the highest level since February 2015, but unusual circumstances, rather than a weakening of the labor market, may have been the cause.

On an unadjusted basis, the state of New York accounted for about 80% of the total increase in claims during the May 7 week. Economists said those applications could be tied to a public-school break in the state and claims filed by striking workers at New York-based Verizon Communications Inc. The data measures individuals who seek first-time benefits, regardless of whether those benefits are ultimately approved, a Labor Department analyst said.

And to be sure, claims remain at historically low levels. Last week marked the 63rd straight week that claims held below 300,000. That's the longest such streak since 1973. The four-week moving average, which evens out weekly swings in the data, rose by 7,500 last week to 275,750.

Such a low level of claims is generally consistent with increased hiring.

The Labor Department reported this month that U.S. payrolls grew by 160,000 in April, the smallest gain since September. Employers have added an average 192,000 jobs a month this year, steady growth but slower than last year's monthly average gain of 229,000. The jobless rate stood at 5% in April, within the range the Federal Reserve considers the economy's long-run average.

Any choppiness in the labor market could be a concern for Fed policy makers as they contemplate raising the central bank's benchmark interest rate for the first time this year. Minutes of an April meeting, released Wednesday, indicated an increase at their next gathering in June is possible, if economic growth accelerates this spring.

Thursday's report showed continuing unemployment claims, a measure of those drawing benefits for more than one week, fell by 13,000 to 2.15 million in the week ended May 7. Continuing claims are reported with a one-week lag.

The Labor Department said there were no special factors impacting this week's initial claims data.

Write to Eric Morath at eric.morath@wsj.com

 

(END) Dow Jones Newswires

May 19, 2016 08:55 ET (12:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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