Jobless Claims Rise to Five-Month High
Applications for U.S. unemployment benefits jumped last week to a five-month high, interrupting steady labor-market progress.
Jobless claims rose by 13,000 to 282,000 in the week ended Dec. 5, the highest level since July 4, a Labor Department report showed Dec. 10. The median forecast in a Bloomberg survey was 270,000. Even with the increase, filings are holding close to four-decade lows.
The jump last week represents a departure from a more subdued level of dismissals and may reflect the difficulty adjusting the data during the year-end holidays. Employers in November hired at a faster pace than projected, highlighting headway in the job market that probably will convince Federal Reserve policy akers to raise borrowing costs next week.
“This is a time of the year when weekly readings can be volatile due to a string of holidays and turn-of-the-year churn in the labor market,” Stephen Stanley, chief economist at Amherst Pierpont Securities, in Stamford, Connecticut, said in a note to clients. “As the November employment report confirmed, the labor market continues to steam ahead toward full employment with a historically low pace of layoffs.”
Estimates of 43 economists in the Bloomberg survey for jobless claims ranged from 260,000 to 285,000. The prior week was unrevised at 269,000. In July, filings dropped to 255,000, the lowest since the 1970s.
While nothing unusual was in the data, claims for Louisiana were estimated because the state was switching to a new system for handling applications, according to the Labor Department.
The four-week average of claims, a less-volatile measure than the weekly figure, rose to 270,750 from 269,250 in the prior week.
The number of people continuing to receive jobless benefits climbed by 82,000 in the week ended Nov. 28, the largest increase in a year, to 2.24 million. The unemployment rate among people eligible for benefits rose to 1.7%, the highest since the week ended Sept. 12, from 1.6%.
Since the beginning of March, claims have been holding below the 300,000 level that economists say is consistent with strength in the labor market.
On the payrolls side of the labor equation, employers added 211,000 workers in November after a 298,000 advance the prior month that was bigger than previously estimated. The unemployment rate held at a more than seven-year low of 5%. The monthly job gain has averaged 210,000 so far this year compared with a 260,000 average last year that was the best since 1999.
Economists project the strides that the labor market has made will prompt Fed officials to raise the benchmark interest rate for the first time since 2006 when they meet Dec. 15-16.
At the same time, low inflation probably will allow the central bank to be gradual with additional rate increases. Another report Dec. 10 from the Labor Department showed prices paid for imported goods declined in November for a fifth straight month.
The import-price index fell 0.4% after a 0.3% decrease a month earlier. Last month’s decline was broad-based, with costs falling for imported fuels, food, capital goods and automobiles.
