The number of Americans making initial claims for state unemployment benefits rose more than expected last week, but the gain may not indicate any weakness in the labor market.
The Labor Department said Thursday that initial jobless claims, a proxy for layoffs, rose by 13,000 to a seasonally adjusted 260,000 in the week ended Oct. 15. Economists surveyed by The Wall Street Journal had expected 250,000 new claims last week.
Jobless applications have increased modestly the past two weeks after touching the lowest level since November 1973 in the week ended Oct. 1. But claims have now stayed below the 300,000 threshold normally associated with a strong jobs market for 85 straight weeks, the longest period since 1970.
According to Reuters, last week’s gain could be related to Hurricane Matthew, which lashed the Southeast, causing many businesses to close at least temporarily. Unadjusted jobless claims for North Carolina increased 2,520 last week.
“The snapback in the number of new filers may be a garden variety makeup for two readings below 250,000, rather than a result driven specifically by the storm,” Stephen Stanley, economist with Amherst Pierpont Securities, told the WSJ.
Thursday’s report also showed the number of people still receiving benefits after an initial week of aid increased 7,000 to 2.06 million in the week ended Oct. 8. But the four-week average of continuing claims dropped 12,750 to 2.05 million, the lowest reading since July 2000.
“The data is consistent with a still-strong trend in employment growth,” said Jim O’Sullivan, economist at High Frequency Economics. Auckland
The Labor Department previously reported that employers added 156,000 jobs and the unemployment rate was 5% in September. “Monthly job growth in 2016 has slowed from last year’s pace, but is still enough to absorb a growing population and draw some people off the labor market’s sidelines,” the WSJ said.