Job Growth Slows as Unemployment Claims Rise

Courtesy of Reuters: The number of Americans filing new claims for unemployment benefits rose more than expected last week, but the underlying trend suggested the labor market continued to heal.

Initial claims for state unemployment benefits increased 19,000 to a seasonally adjusted 348,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 3,000 more applications received than previously reported.

Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 330,000 in the week ended Jan. 25.

The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, edged up 750 to 333,000.

A Labor Department analyst said claims for Louisiana were estimated because of inclement weather, adding there were no special factors affecting the state level data.

Job growth slowed sharply in December, but economists shrugged off the surprise meager increase in payrolls, pointing to freezing temperatures that hit sectors such as construction and transportation.

Federal Reserve officials also appeared to dismiss the slowdown in payrolls, saying at the end of a two-day policy meeting on Wednesday that the labor market on balance showed further improvement.

The U.S. central bank announced another reduction to its monthly bond purchases on Wednesday.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 16,000 to 2.99 million in the week ended Jan. 18.

The so-called continuing claims have been elevated in recent weeks and some economist say the cold weather could be preventing many recipients from going out to search for work and companies to delay hiring.

Category: General Update