Jobless Claims Unexpectedly Rise, But Labor Market Continues to Improve
New jobless claims rose more than expected last week, but the underlying trend may still point to an improving labor market, the Labor Department said on Thursday.
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Initial claims for state unemployment benefits rose by 15,000 to a seasonally adjusted 381,000 in the week ended December 24. The prior week’s claims data was revised up to 366,000 from a previously reported 364,000.
However, because of the public holiday on Monday, claims for seven states — including California and Virginia — had to be estimated for today’s Labor Department report. The four-week moving average, considered to be a better measure of overall trends, fell 5,750 to 375,000, its lowest level since June 2008.
Though last week’s rise in initial claims interrupted three straight weeks of declines, it seems the healing in the job market remains intact. Claims remain below the 400,000 mark that is normally associated with an improvement in labor market conditions.
Positive employment trends should feed into consumer spending, which accounts for roughly 70 percent of the U.S. economy and slowed significantly in November. Firming employment has already helped buoy consumer confidence, according to the latest reports.
However, the economy’s resilience could be tested next year if Europe’s sovereign debt crisis worsens.
Today’s claims data showed that the number of people still receiving regular state benefits after an initial week of aid rose 34,000 to 3.60 million in the week ended December 17.
A total of 7.23 million people were receiving unemployment benefits in the week ended December 10, up 79,385 from the previous week.
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