The number of Americans filing for jobless claims rose to a five-month high last week, but this is unlikely to signal a shift in labor market conditions as claims for a number of states were estimated due to Monday’s holiday.
Initial claims for government unemployment benefits rose 14,000 to 225,000 seasonally adjusted claims for the week ending November 9, the highest reading since June 22, the Labor Department said Thursday. Economists had expected the figure to rise to 215,000 in the last week. The Labor Department said claims for California, Hawaii, Kansas, Pennsylvania, Puerto Rico and Virginia had been issued. Some states did not have sufficient time to process claims data because of the Veteran Day holiday.
The four-week moving average of initial claims, which is a better gauge of labor market trends as it makes volatility from week to week only 1,750 rose to 217,000 last week. However, layoffs remain low even as the pace of employment slowed from last year’s rapid pace, keeping the labor market on firm ground while easing financial market fears of recession.
The labor market, characterized by a low unemployment rate in about 50 years, is supporting consumer spending and helping to offset some of the injuries that have hit the economy from a 16-month trade war between the US and China. Federal Reserve Chairman Jerome Powell told lawmakers on Wednesday that the labor market “has benefited a wide range of individuals and communities.”
The US central bank last month cut interest rates for the third time this year, citing a pause in its easing role that began in July when it cut borrowing costs for the first time since 2008. A report on Thursday also showed the number of people receiving benefits after an initial week of aid. It dropped by about 10,000 to 1,680,000 for the week ending 2 November.
Continued alleged claims are likely to have been boosted in recent weeks by a 40-day GM workers’ strike, which economists said provoked a temporary layoff of auto parts suppliers. The four-week moving average of 1,690,000 was unchanged.