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Jan 3, 2019

US weekly jobless claims increase more than expected

Fred Imbert@foimbertJohn Melloy@johnmelloyEustance Huang

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The number of Americans filing applications for jobless benefits increased more than expected last week, but the underlying trend continued to point to labor market strength despite ongoing financial market volatility.
Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 231,000 for the week ended Dec. 29, the Labor Department said on Thursday. Data for the prior week was revised higher to show 5,000 more applications received than previously reported.
Economists polled by Reuters had forecast claims increasing to 220,000 in the latest week.
The Labor Department said claims for California and Virginia were estimated last week. Unadjusted claims for both of those states declined last week.
A Labor department official said there was no indication of an increase in filings last week from federal workers furloughed because of a partial shutdown of the government that is now in its second week.
Data on claims filed by federal employees is released with a one-week lag. The shutdown, which started on Dec. 22, was triggered by President Donald Trump’s demand for $5 billion in border wall funding.
Some 800,000 employees from the Departments of Homeland Security, Transportation, Commerce and others have been furloughed or are working without pay.
Claims data tends to be noisy around year-end holidays. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, slipped 500 to 218,750 last week.
Last week’s claims data has no bearing on December’s employment report which is scheduled for release on Friday as it falls outside the survey period.
According to a Reuters survey of economists, nonfarm payrolls likely increased by 177,000 jobs last month after rising 155,000 in November. The unemployment rate is forecast holding steady at 3.7 percent, a near 49-year low and not too far from the Federal Reserve’s forecast of 3.5 percent by the end of 2019.
With the labor market viewed at being at or beyond full employment, the pace of job growth is slowing as employers struggle to find workers. Some of the moderation in employment gains has been attributed to tightening financial market conditions amid a sharp sell-off on the stock market.
The Fed raised interest rates last month for the fourth time in 2018, but forecast fewer rate hikes this year and signaled its tightening cycle is nearing an end in the face of financial market volatility and slowing global growth.
Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid increased 32,000 to 1.74 million for the week ended Dec. 22. The four-week moving average of the so-called continuing claims rose 26,000 to 1.70 million.
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