US jobless claims rise modestly as labour market tightens

US jobless claims rise modestly as labour market tightens

For the week ending Sep 23, new claims for unemployment insurance rose 12,000 to a seasonally-adjusted 272,000, which was 3,000 fewer than analysts had expected.
WASHINGTON: The number of Americans filing for unemployment benefits increased less than expected last week, suggesting the labour market continued to tighten after recent hurricane-related disruptions.Other data on Thursday (Oct 26) showed the goods trade deficit widened in September as an increase in exports was outpaced by a jump in imports. Labour market strength supports the view that the Federal Reserve will raise interest rates in December.Initial claims for state unemployment benefits increased 10,000 to a seasonally-adjusted 233,000 for the week ended Oct 21, the Labour Department said. Claims fell to 223,000 in the prior week, which was the lowest level since March 1973.Economists had forecast claims rising to 235,000 in the latest week. They have declined from the almost three-year high of 298,000 hit at the start of September in the aftermath of Hurricanes Harvey and Irma, which ravaged parts of Texas and Florida.The impact of Harvey and Irma has largely dropped out of the claims data for the mainland United States. But Irma and Hurricane Maria continue to impact claims for the Virgin Islands and Puerto Rico, now virtually isolated because of the destruction of infrastructure due to the storms.A Labour Department official said they continued to estimate claims data for the islands.
The dollar held gains versus a basket of currencies after the data, while prices for US Treasuries were little changed. US stock index futures were trading mostly higher.Last week marked the 138th straight week that claims remained below the 300,000 threshold, which is associated with a strong labour market. That is the longest such stretch since 1970, when the labour market was smaller.
The labour market is near full employment, with the jobless rate at more than a 16-1/2-year low of 4.2 percent.The four-week moving average of initial claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 9,000 to 239,500 last week. That suggests a sharp rebound in job growth in October after non-farm payrolls dropped by 33,000 jobs in September.The claims report also showed the number of people still receiving benefits after an initial week of aid declined 3,000 to 1.90 million in the week ended Oct 14, the lowest level since December 1973.The four-week moving average of the so-called continuing claims fell 4,500 to 1.90 million, the lowest reading since January 1974. The continuing claims data covered the week of the household survey from which October's unemployment rate will be derived.The four-week average of continuing claims fell 40,500 between the September and October survey weeks, suggesting a further improvement in the unemployment rate as labor market slack continues to diminish.In a separate report on Thursday, the Commerce Department said the goods trade deficit rose 1.3 per cent to US$64.1 billion in September. Exports of goods increased US$0.9 billion to US$129.6 billion. Goods imports gained US$1.7 billion to US$193.7 billion.
Source: Reuters
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