U.S. jobless claims rise; planned layoffs surge

Thu May 5, 2016 9:06am EDT
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By Lucia Mutikani

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest gain in more than a year, but the underlying trend continued to point to a strengthening labor market.

Another report on Thursday showed a 35 percent surge in planned layoffs by U.S.-based employers last month. Most of the announced job cuts were concentrated in the energy sector, which is reeling from low oil prices that have hurt profits.

Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 274,000 for the week ended April30, the Labor Department said. Last week's increase was the largest since February of last year.

"We are assuming the move in claims is largely technical. By all accounts, businesses cannot find the skilled labor they need," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

Economists polled by Reuters had forecast initial claims rising to 260,000 in the latest week. Jobless claims have now been below 300,000, a threshold associated with healthy labor market conditions, for 61 consecutive weeks, the longest stretch since 1973. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,000 to 258,000 last week.

Prices for U.S. government debt slightly pared losses after the data, while the U.S. dollar .DXY edged up against a basket of currencies. U.S. stock futures were trading higher.

The latest claims data has no bearing on April's employment report as it falls outside the survey period.

Claims were generally low in April compared to March. That points to a fairly robust labor market despite a report on Wednesday showing hiring by employers in the private sector last month was the weakest in three years.   Continued...

Job applicants await their turn at the Lockheed Martin booth at a U.S. Chamber of Commerce Foundation "Hiring Our Heroes" military job fair in Washington January 8, 2016.  REUTERS/Gary Cameron