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US jobless claims rise to six-month high last week

Thursday, December 22, 2016 - 21:53

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The number of Americans filing for unemployment benefits rose to a six-month high last week, but remained below a level that is associated with labor market strength.

[WASHINGTON] The number of Americans filing for unemployment benefits rose to a six-month high last week, but remained below a level that is associated with labor market strength.

Initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 275,000 for the week ended Dec 17, the highest since June, the Labor Department said on Thursday. Claims for the prior week were unrevised.

It was the 94th straight week that claims were below 300,000, a threshold associated with a healthy labour market. That is the longest stretch since 1970, when the labour market was much smaller. The labour market is viewed as being at or near full employment.

Labour market strength contributed to the Federal Reserve raising its benchmark overnight interest rate last Wednesday by 25 basis points to a range of 0.50 per cent to 0.75 per cent. The US central bank forecast three rate hikes in 2017.

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Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 256,000 in the latest week. Claims tend to be volatile around this time of the year because of different timings of the various holidays.

A Labor Department analyst said there were no special factors influencing last week's data and that no states had been estimated.

The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, increased 6,000 to 263,750 last week.

Last week's claims data covered the survey period for December nonfarm payrolls. The four-week average of claims increased 10,750 between the November and December survey period, suggesting some moderation in job gains.

Nonfarm payrolls increased by 178,000 jobs in November.

The claims report also showed the number of people still receiving benefits after an initial week of aid rose 15,000 to 2.04 million in the week ended Dec 10. The four-week average of the so-called continuing claims fell 1,750 to 2.04 million.

REUTERS

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