U.S. jobless claims up, but trend favors strong labor market
The number of Americans filing new claims for unemployment benefits rose more than expected last week, but will probably do little to change views that the labor market was strengthening.
Initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 311,000 for the week ended Aug. 9, the Labor Department said on Thursday, above economists’ expectations for a rise to only 295,000.
There is, however, little doubt that conditions in the jobs market are firming. Although the four-week average of claims, a better measure of labor market trends as it irons out week-to-week volatility, rose modestly last week, it remained at levels consistent with solid job gains.
The dollar edged down against a basket of currencies after the data.
A significant decline in layoffs, which has pushed claims down to their pre-recession levels, has been the major driver of an improving job market.
But hiring is also gaining traction. A report on Tuesday showed hiring rose in June to its highest level since February 2008. The number of job openings that month was the highest since February 2001.
The strengthening labor market picture has some economists betting on an early interest rate hike from the Federal Reserve.
The U.S. central bank has kept its benchmark interest rate near zero since December 2008 and has shown little sign of being in a hurry to start tightening monetary policy.
Fed Chair Janet Yellen argues that there is still slack in the labor market, citing tepid wage growth and a large number of long-term unemployed Americans and those working part-time.
The jobless claims report showed the number of people still receiving benefits after an initial week of aid increased 25,000 to 2.54 million in the week ended Aug. 2.
The unemployment rate for people receiving jobless benefits was 1.9 percent for the fifth successive week.
In a second report, the Labor Department said import prices decreased 0.2 percent last month as a decline in the cost of petroleum offset a rebound in food prices.
Import prices had gained 0.1 percent in June. In the 12 months through July, import prices increased 0.8 percent.
Sluggish global demand is keeping imported inflation subdued. Imported petroleum prices fell 1.2 percent in July, the largest decline since November, after rising 1.1 percent the prior month. Imported food prices increased 1.0 percent. That followed a 1.6 percent decline in June.
Imported inflation was also dampened by weak automobiles prices, which recorded their largest drop since December 1992.