Weekly Jobless Claims Jump Unexpectedly
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The number of U.S. workers filing initial claims for jobless aid rose last week, suggesting some softening in the U.S. labor market, but a forward-looking economic gauge released Thursday pointed to a pick-up in growth.
First-time applications for state unemployment insurance benefits rose for a third straight week, climbing to 324,000 in the week ended June 16 from a upwardly revised 314,000 the prior week, the Labor Department said.
In a separate report, the Conference Board, a private research firm said its index of leading economic indicators rose 0.3 percent in May, suggesting the economy will strengthen through the summer and into the fall.
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Ken Goldstein, an economist for the Conference Board, said the index may be suggesting that the economy has weathered the negative impact of a housing slump and a spring run-up in gasoline prices.
The rise in claims for jobless benefits last week took them to their highest level since the week ended April 21. Analysts took note because last week corresponds with a survey week for the closely watched government count of non-farm payrolls.
Rudy Narvas, senior analyst at 4Cast Ltd in New York, said the data "should point to some downside risk to the payrolls number for June, suggesting that it is going to be slightly softer than May." Payrolls expanded by a solid 157,000 in May.
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U.S. government debt prices were mixed after the data as the rise in jobless claims, which was greater than Wall Street economists had expected, offset downward pressure on prices stemming from worries over rising global interest rates.
The data appeared to have little impact on stock prices. Major U.S. stock indexes were up marginally in mid-morning as investors tried to shake off concerns relating to trouble in the U.S. subprime mortgage sector.
The increase in first-time jobless claims helped push a closely watched four-week moving average, which flattens weekly fluctuations to give a better sense of underlying trends, up for a fourth consecutive week. The average rose to 314,500 from 312,000 the prior week.
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The number of people continuing to draw benefits after an initial week of aid rose 39,000 to 2.52 million in the week ended June 9, the latest period for which figures were available, slightly more than the 2.50 million forecast by analysts.