US jobless benefit claims at 6-month high

WASHINGTON • The number of Americans filing for unemployment insurance benefits jumped to a nearly six-month high last week during the Christmas holiday season, the US Labour Department reported on Thursday.

Initial jobless claims rose by 20,000 to 287,000 in the week ending Dec 26. That marked the highest level of new claims, a sign of the pace of layoffs, since the first week of July.

But claims overall have held below 300,000 since early March, amid moderate economic growth and steady job creation that pushed the unemployment rate to 5 per cent in November, a seven-year low.

The four-week moving average, which helps to smooth weekly volatility, rose by 4,500 to 277,000 last week. A year ago, it was 287,750. The Labour Department said there were no special factors impacting the data.

"Despite a modest rise in initial claims towards year-end, both initial and continuing jobless claims improved considerably in 2015 and both series remain at or near their lowest levels since the early 1970s," said Mr Rob Martin at Barclays Research. "These data indicate that, at least from the separations side, the labour market remained strong to the very end of the year."

While there was nothing unusual in the state-level data, the jump could have been caused by the volatility introduced when the numbers are adjusted for seasonal variations, a Labour Department spokesman said.

Limited firings, steady hiring and an unemployment rate at more than a seven-year low underscore job market improvement that allowed the Federal Reserve to lift interest rates last month for the first time since 2006.

Initial jobless claims reflect weekly firings, and a sustained low level of applications has typically coincided with faster job gains.

Many layoffs may also reflect company- or industry-specific causes, such as cost-cutting or business restructuring, rather than underlying labour market trends.

"We do have to discount the heightened volatility we have around this time of the year," said Mr Mike Englund, chief economist at Action Economics in Boulder, Colorado, who correctly projected the jump. "When the dust settles, we'll see claims drop back down. There will be continued slow improvement in the labour market."

AGENCE FRANCE-PRESSE, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on January 02, 2016, with the headline 'US jobless benefit claims at 6-month high'. Print Edition | Subscribe