WASHINGTON: The number of Americans filing new claims for jobless benefits fell more than expected last week, with filings in Massachusetts decreasing sharply, suggesting the labor market remains tight.

Initial claims for state unemployment benefits dropped 22,000 to a seasonally adjusted 242,000 for the week ended May 13, the Labor Department said on Thursday. Claims jumped to 264,000 in the prior week, driven by a surge in filings for unemployment insurance in Massachusetts.

The state’s Department of Unemployment Assistance said it was “experiencing an increase in fraudulent claim activities where people attempt to gain access to active UI accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits.”

Economists polled by Reuters had forecast 254,000 for the latest week. Unadjusted claims for Massachusetts fell 14,042 last week.

US weekly jobless claims jump to highest level since late 2021

The labor market is being closely watched for signs of stress from the Federal Reserve’s fastest interest rate-hiking campaign since the 1980s to tame inflation.

Though it has shown some signs of cooling, the labor market has remained tight, with 1.6 job openings for every unemployed person in March, well above the 1.0-1.2 range that is consistent with a jobs market that is not generating too much inflation.

The claims report covered the period during which the government surveyed business establishments for the nonfarm payrolls portion of May’s employment report.

Claims were little changed between the April and May survey weeks. The economy created 253,000 jobs in April, with the unemployment rate falling back to a 53-year low of 3.4%.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 8,000 to 1.799 million during the week ending May 6, the claims report showed. The so-called continuing claims remain low by historical standards, but it could be taking longer for some unemployed to find new work.