US jobless claims up, but job growth steady
WASHINGTON: More Americans than expected filed new claims for unemployment benefits last week, but still not enough to signal a material shift from the recent pace of moderate job growth.
Initial claims for state unemployment benefits increased by 18,000 to a seasonally adjusted 354,000, the Labor Department said. Economists had expected first-time applications to rise to 340,000 last week.
The four-week moving average for new claims, which irons out week-to-week volatility, rose 2,500 to 348,250 – holding below the 350,000 mark that economists usually associate with steady job gains.
Despite the increase last week, claims remained in the middle of their range for this year.
“The trend we’ve been seeing is still well intact. Where jobless claims are right now should tell you that the economy is doing okay, that it’s on a decent path,” said Brett Ryan, an economist at Deutsche Bank Securities in New York.
The dollar trimmed gains versus the euro and yen after the data, while yields on US Treasuries fell slightly.
Last week’s data covered the period in which the government surveyed companies for June’s nonfarm payrolls count. Claims increased 10,000 between the May and June survey periods, suggesting little change in the pace of job creation.
Employers added 175,000 new jobs to their payrolls last month, with the unemployment rate ticking up a tenth of a percentage point to 7.6 per cent. Job gains have averaged 172,000 per month over the past 12 months.
The Federal Reserve, which has been closely monitoring the labour market, said on 26 June that downside risks to the outlook for the jobs market had diminished since the fall and it painted a fairly upbeat picture of the economy.
Fed Chairman Ben Bernanke said the US central bank expected to slow the pace of its bond purchases later this year and bring them to a halt around the middle of 2014.
The Fed is buying US$85 billion in bonds per month in an effort to keep interest rates low and drive down still-high unemployment.
The claims report showed the number of people still receiving benefits under regular state programmes after an initial week of aid fell 40,000 to 2.95 million in the week to 8 June.