US jobless claims edge up, but labour market still strong

The number of Americans filing new applications for unemployment benefits rose less than expected last week, suggesting labor market conditions are continuing to tighten.

Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 270,000 for the week ended Aug. 1, the Labour Department said on Thursday. Claims for the prior week were unrevised.

It was the 22nd consecutive week that claims held below the 300,000 threshold, which is associated with a strengthening labor market. Economists had expected claims to rise to 273,000 last week.
 

 

Claims are volatile during the summer when automakers usually shut assembly plants for annual retooling. Some firms keep production lines running, which can throw off a model the government uses to smooth the data for seasonal variations.

However, a Labour Department analyst said there were no special factors influencing the data and no states had been estimated.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 6,500 to 268,250 last week.

U.S. stock index futures and prices for U.S. treasuries were slightly higher after the data. The U.S. dollar also gained against the yen and euro.

The claims data has no bearing on Friday's employment report for July. According to a Reuters survey of economists, nonfarm payrolls likely increased by 223,000 last month, matching June's gain. Though job growth has slowed from last year's brisk pace, many economists say the labor market is approaching full employment.

Last week, the Federal Reserve upgraded its assessment of the jobs market, describing employment gains as "solid." The Fed, which is expected to raise interest rates this year for the first time in nearly a decade, also said labor market slack had diminished "since early this year."

Thursday's claims report showed the number of people still receiving benefits after an initial week of aid fell 14,000 to 2.26 million in the week ended July 25.