The number of Americans filing for unemployment benefits increased more than expected last week, but the rise probably does not signal a material shift in labor market conditions as claims for several states, including California, were estimated.
Initial claims for state unemployment benefits jumped 13,000 to a seasonally adjusted 248,000 for the week ended May 27, the Labor Department said on Thursday.
Data for the prior week was revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 239,000 in the latest week.
It was the 117th straight week that claims were below 300,000, a threshold associated with a healthy labor market.
That is the longest such stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the jobless rate at a 10-year low of 4.4 percent.
A Labor Department official said claims for California, Hawaii, Kansas, Kentucky, Louisiana, North Dakota, Texas and Virginia were estimated because of the Memorial Day holiday on Monday.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose only 2,500 to 238,000 last week.
The Federal Reserve said on Wednesday in its Beige Book report of anecdotal information on business activity collected from contacts nationwide that labor markets continued to tighten from early April through late May.
The U.S. central bank said “most” districts had cited worker shortages across a broadening range of occupations and regions.
The claims report has no bearing on the May employment report, which is scheduled for release on Friday, as it falls outside the survey period. Weekly claims held below 250,000 in May, which suggests another month of strong job growth. Nonfarm payrolls increased by 211,000 in April.
According to a Reuters survey of economists, payrolls likely increased by 185,000 jobs in May. The unemployment rate is forecast to be unchanged at 4.4 percent. The jobless rate has dropped by four-tenths of a percentage point this year.
Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid fell 9,000 to 1.92 million in the week ended May 20. The so-called continuing claims now have been below 2 million for seven straight weeks, pointing to shrinking labor market slack.
The four-week moving average of continuing claims dropped 16,000 to 1.91 million, the lowest level since January 1974.
Credit to CNBC