WASHINGTON (TIP): New applications for US unemployment insurance benefits rose last week to their highest level since February, suggesting some slowdown in the labor market recovery.
Initial claims for state unemployment benefits rose 15,000 to a seasonally adjusted 2,97,000 for the week that ended July 4, the US department of labor said on July 9.
Even with the rise in claims, the latest report marks the 18th consecutive week of new filings below 3,00,000, which is considered consistent with a firming labor market.
The previous week’s claims were revised to 2,82,000, showing that 1,000 more people filed than initially reported.
Economists polled by Reuters had expected new applications to fall to 2,75,000 last week.
The four-week moving average of claims, which smoothes out week-to-week fluctuations and is therefore considered a better gauge of the labor market, rose 4,500 to 2,79,500 last week.
US Treasuries erased some losses after the data, while the dollar trimmed gains against the euro and the yen. Stock index futures were unchanged.
The claims report covered the period which included the US Independence Day holiday, but a labor department analyst said there was nothing unusual in the state level data last week. He did note that claims data tends to be volatile in July because of retooling by auto plants during that period. Jesse Hurwitz, an economist at Barclays Capital, said that because of the holiday and auto plant shutdowns, he was inclined to look past the volatility in the report. “Trend readings of both initial and continuing claims remain low from a historical perspective, which we expect to continue,” he said.
Continued claims – the number of people still claiming jobless benefits after an initial week of aid – rose 69,000 to 2.334 million in the week ended June 27, the labor department said. The labor market has been tightening, with the unemployment rate not too far from the 5.0 per cent to 5.2 per cent range that most Federal Reserve officials consider consistent with full employment.
A government report last week showed employers adding 2,23,000 jobs in June, a slowdown from the prior month, and the US unemployment rate sliding to 5.3 per cent.