Unexpected Rise in Jobless Claims to 229,000

U.S. jobless claims rose to 229,000 in the week ended June 6, the highest since February and above the 219,000 economists had expected, the Labor Department said Thursday. The prior week's reading was unrevised at 225,000.

The increase, though modest, snapped a two-week decline and pushed the four-week moving average higher for the first time in a month. Weekly claims are the timeliest gauge of layoffs in the world's largest economy and a direct input into the Fed's labor market assessment.

Treasury yields slipped after the print, trimming earlier gains as traders dialed back bets on the next rate move. The 10-year yield traded near the session low. The dollar edged lower against the euro and yen, giving back some of this week's advance. Gold rose slightly, recovering from an overnight dip. S&P 500 futures held near unchanged, with rate-sensitive sectors like utilities and real estate outperforming.

The claims data comes after a series of stronger labor market reports that had raised the odds of additional tightening. Swap markets had priced in a roughly 40% chance of a July rate hike before the release; that probability declined afterward. The Fed next meets July 26-27, with the June payrolls report due July 5 providing the next hard read on hiring.