The number of Americans filing for unemployment benefits rose more than expected last week, but the underlying trend remained consistent with tightening labor market conditions. Initial claims for state unemployment benefits increased 22,000 to a seasonally adjusted 259,000 for the week ended Jan. 21, the Labor Department said on Thursday. Claims for the prior week were revised to show 3,000 more applications received than previously reported.
Claims have now been below 300,000, a threshold associated with a healthy labor market, for 99 consecutive weeks. That is the longest stretch since 1970, when the labor market was much smaller. Last week’s data included the Martin Luther King Jr. holiday, which could have impacted on the data. Claims tend to be volatile around this time of the year because of different timings of the various holidays. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,000 to 245,500 last week, the lowest since November 1973.
Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 247,000 in the latest week. A Labor Department analyst said there were no special factors influencing last week’s data and no states had been estimated. The labor market is viewed as being at or close to full employment, with the unemployment rate near a nine-year low of 4.7 percent. With the labor market tightening, wage growth is picking up, which should provide a boost to the economy through strong consumer spending and a continued housing market recovery.
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Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid increased 41,000 to 2.1 million in the week ended Jan. 14. The four-week average of the so-called continuing claims fell 1,250 to 2.1 million. The continuing claims data covered the survey week for January’s unemployment rate. The four-week average of claims increased 49,000 between the December and January survey weeks, suggesting little change in the unemployment rate this month.