WASHINGTON • The number of Americans filing for unemployment benefits rose more than expected last week, suggesting some loss of momentum in the labour market amid a sharp economic slowdown and a stock market sell-off.
Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 285,000 for the week ended Jan 30, the Labour Department said yesterday.
The four-week average exceeded 280,000 for the third consecutive week, indicating the pace of firings has sped up a little from historically low levels.
Claims, however, remained below 300,000, a level associated with strong labour market conditions, for the 48th straight week. That is the longest run since the early 1970s.
While the uptick in claims bears watching, it may also represent the week-to-week volatility common to claims data around holidays, economists said.
Other recent reports show employers are holding on to existing staff and are still adding workers as they anticipate sales will improve.
"Claims data is volatile so we need to see the trend," Ms Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, said before the report. "Cuts in the energy sector could put upward pressure on claims. If businesses feel the global slowdown worsening, they might start to pull back a bit on hiring. But we haven't seen that yet."
Other figures show "fairly steady demand for labour", she added.
One state, Oklahoma, estimated its data for jobless claims last week because of a glitch in its computer system. Otherwise, there was nothing unusual in the figures, a Labour Department spokesman said when the report was released.
The rise in claims came as economic growth slowed to a 0.7 per cent annual pace in the fourth quarter, held back by the headwinds of a strong US dollar and faltering global demand.
A downturn in capital spending by energy companies, reeling from a collapse in oil prices, and inventory destocking by businesses are also constraining growth. At the same time, a stock market rout sparked by fears of a global economic slump has caused financial conditions to tighten.
The claims data has no bearing on last month's employment report, which is scheduled to be released today, as it falls outside the survey period.
BLOOMBERG, REUTERS
