Jobless claims point to slow healing in labor market

Thu Jan 31, 2013 9:15am EST
 

By Jason Lange

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits last week stayed in a range consistent with job growth and incomes rose in December by the most in eight years, mildly positive signs for a still-fragile economy.

The data suggests points to some underlying momentum in the economy despite a surprise contraction in gross domestic product during the fourth quarter, which largely came from temporary factors.

Last week, initial claims for state unemployment benefits increased 38,000 to 368,000, the Labor Department said on Thursday.

The increase follows a week where new claims were at their lowest in five years and still points to an economy where employers are adding jobs, albeit at a lackluster pace.

"It's still consistent with modest employment growth," said Sam Bullard, an economist at Wells Fargo Securities in Charlotte, North Carolina.

Economists polled by Reuters had expected claims to increase to 350,000.

Claims have been very volatile this month, dropping sharply in the week ended January 12 and maintaining the trend in the following week. That was largely because the model used by the department to smooth out the seasonal variations has been unusually generous during the first three weeks of January.

The four-week moving average for new claims, a better measure of labor market trends, gained 250 to 352,000, suggesting a steady improvement in labor market conditions.   Continued...

 
Job seekers wait in line to speak to recruiters at a job fair put on by online recruiting company TheLadders at Grand Central Station in New York, January 10, 2013. REUTERS/Lucas Jackson