US claims for unemployment benefits rise by 13,000

WASHINGTON – The number of Americans seeking unemployment benefits rose to the highest level in five weeks but still remained close to the recent 43-year lows.

THE NUMBERS: Weekly applications for jobless benefits rose by 13,000 last week to 260,000, the Labor Department reported Thursday. That was the highest level since an identical 260,000 claim applications were filed the week of Sept. 10.

Since that time, claims had fallen to the lowest levels since November 1973. Even with last week’s gain, claims, which are a proxy for layoffs, remain at levels indicating that workers are enjoying job security despite sluggish economic growth.

The increase in benefit applications was bigger than economists had been forecasting but some suggested that disruptions in filing applications earlier caused by Hurricane Matthew might have been a factor.

Stephen Stanley, chief economist at Amherst Pierpont Securities, said that there were claims increases in North Carolina that could have been hurricane related and he said that big gains in California and Kentucky might be “a garden variety makeup” for lower-than-expected readings in the previous two weeks.

The four-week average for claims, a less volatile measure, rose by 2,250 to 251,750 last week.

Overall, 2.06 million Americans are collecting unemployment checks, down 6 per cent from a year ago.

THE TAKEAWAY: The labour market has continued to show steady improvement this year although at a slower pace than in 2015. Employers added 156,000 jobs in September, fewer than the 167,000 jobs added in August and below last year’s average monthly gain of 230,000.

The unemployment rate inched up to 5 per cent in September, compared to 4.9 per cent in August, as more than 400,000 people entered the labour market to look for jobs but not all of them were immediately successful.

Still, the unemployment rate is just half the 10 per cent high hit in October 2009 as the country was struggling to pull out of the Great Recession.

KEY DRIVERS: Applications for jobless benefits staying close to a four-decade low provides strong evidence that the job market remains resilient despite the fact that economic growth has been anemic so far this year. The economy, as measured by the gross domestic product, grew at a rate of just 1.4 per cent in the second quarter after an even weaker 0.8 per cent increase in the first three months of the year.

Economists believe that growth has accelerated in the just-completed third quarter to around 2.5 per cent to 3 per cent. The government will report that number next week.