Jobless claims rise to near nine-month high

WASHINGTON Thu Dec 19, 2013

(Reuters) – The number of Americans filing new claims for unemployment benefits rose last week to the highest level in nearly nine months, casting a shadow on the labor market.

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 379,000, the Labor Department said on Thursday. That was the highest level since March and marked the second straight week that claims have risen.

Economists polled by Reuters had expected first-time applications to fall to 334,000 last week.

The four-week moving average for new claims, which irons out week-to-week volatility, increased 13,250 to 343,500.

“This is not really good. Some of us had thought last week’s jump was an aberration. We have to see what’s going on here. Obviously the Fed won’t be looking at these numbers kindly after what happened yesterday,” said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania.

The Federal Reserve on Wednesday said it viewed the risks to the outlook for the economy and the labor market as “having become more nearly balanced.” The U.S. central bank announced it would reduce its monthly $85 billion bond buying program by $10 billion starting in January.

The claims data is difficult to adjust for seasonal fluctuations around the Thanksgiving and Christmas holidays, lessening its reliability as an indicator of the labor market’s health. Other labor market indicators have pointed to a strengthening in job growth.

The dollar fell against the yen on the data. U.S. stock index futures were little changed.

Last week’s claims data covered the period for the December nonfarm payrolls survey. Claims increased 53,000 between the November and December survey periods, but seasonal volatility reduces their usefulness in trying to predict payroll growth.

Payrolls increased solidly in October and November. The unemployment rate dropped to a five-year low of 7.0 percent in November.

A Labor Department analyst said no states had been estimated, but noted that claims were still in a period of volatility related to the holidays.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 94,000 to 2.88 million in the week ended December 7.

(Reporting by Lucia Mutikani, additional reporting by Richard Leong in New York; Editing by Paul Simao)

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