The number of Americans applying for unemployment benefits rose last week, reaching a record level in 3 months.
Initial claims for unemployment benefits rose by 11,000 to 261,000 for the week ending Jan. 6, the highest level since late September 2016, according to a declaration by the Labor Department on Wednesday. Unemployment claims have now risen for four weeks in a row.
Most probably, this increase does not hint to a fundamental shift in labor market conditions, as claims data tend to fluctuate during the year-end holidays. Analysts had expected claims to fall to 245,000 last week.
A large part of the country was exposed to freezing temperatures and snow during the first week of 2018, which may make it difficult for some people to report for work. Unadjusted claims in New York City rose by 27,170 last week, more than half of all national claims.
The Ministry of Labor stated that claims proceedings were still pending in the Virgin Islands, after they had been hit by the Irma and Maria hurricanes, while claims processing in Puerto Rico were still abnormal.
Last week, the unemployment claims remained below the 300,000 threshold limit, linked to a strong labor market. This is the longest stretch since 1970, when the labor market was much smaller. The labor market is close to full employment, with unemployment at its lowest levels in 17 years, at 4.1% last week. The continued low level of unemployment claims indicates a strong labor market. However, job growth is expected to slow down this year as the labor market will reach full employment rates. Nonfarm jobs rose by 148,000 in December, after rising by 252,000 in November.
The claims report on Thursday also showed that the number of people receiving unemployed benefits fell by 35,000, to 1.87 million in the last week of 2017, the lowest level since 1973. The 4-week average for the continuing claims was down by 5,500 to 1.91 million.