Jobless claims up, trend favors strong labor market

Thu Aug 14, 2014 11:53am EDT
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By Lucia Mutikani

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits rose more than expected last week, but the increase did little to change views that the labor market was strengthening.

Initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 311,000 for the week ended Aug. 9, the Labor Department said on Thursday.

Economists, who had expected a rise to only 295,000, shrugged off the rise. Claims are settling down after volatility in July related to annual automobile plant shutdowns had at one point pushed new filings to their lowest level since 2006.

"Today's report continues to signal a solid labor market that is experiencing a very low pace of layoffs," said Omair Sharif, senior economist at RBS in Stamford, Connecticut.

The four-week average of claims, a better measure of labor market trends as it irons out week-to-week volatility, rose 2,000 last week to 295,750. However, claims at that level are consistent with solid job gains.

A significant decline in layoffs, which has pushed claims down to their pre-recession levels, has been the major driver of an improving job market. But other parts of the labor market puzzle are also falling into place.

A report on Tuesday showed hiring rose in June to its highest level since February 2008. The number of job openings that month was the highest since February 2001.

The strengthening labor market picture has some economists betting on an early interest rate hike from the Federal Reserve.   Continued...

A job seeker (R) meets with a prospective employer at a career fair in New York City, October 24, 2012. REUTERS/Mike Segar