Weekly jobless claims rise 34,000, temporary auto plant shutdowns injecting volatility in data
WASHINGTON (Reuters) — The number of Americans filing new claims for unemployment benefits rebounded last week, returning to levels consistent with only modest job growth after a seasonal quirk caused a sharp drop the prior period.
Initial claims for state unemployment benefits increased 34,000 to a seasonally adjusted 386,000, the Labor Department said on Thursday. Claims had dropped by 24,000 in the prior week and a combined 36,000 over the previous two weeks.
Economists polled by Reuters had forecast claims rising to 365,000 last week. The four-week moving average for new claims, a better measure of labour market trends, fell 1,500 to 375,500 — staying in the middle of the range it has held for much of 2012.
"The snapback in the pace of claims should not be particularly surprising as last week's favorable seasonal unwinds," said Millan Mulraine, senior macro strategist at TD Securities in New York.
"However, we believe that the current level of initial jobless filings overestimates the true pace of jobless claims, and should see claims fall back to around 370,000 in the coming weeks."
Claims data is volatile in July because of the timing of the annual auto plant shutdowns for retooling.
Automakers have not embarked on wholesale plant shutdowns this year, throwing off the model the department uses to smooth the data for typical seasonal patterns.
An official with the department said it was still experiencing volatility related to the auto layoffs that usually happen at this time of year.
U.S. Treasury debt prices trimmed losses after the report, while the dollar fell against the euro.
Last week's claims data covers the period for the July payrolls count. The four-week average of new claims dropped 12,000 between the June and July survey periods, suggesting a modest improvement in non-farm payrolls.
The labour market has suffered three months of sub-100,000 job growth as employers put the brakes on hiring amid a cloud of uncertainty spawned by fears of sharp contraction in U.S. fiscal policy and debt problems in Europe.
Federal Reserve Chairman Ben Bernanke told lawmakers on Wednesday the U.S. central bank, which last month expanded its efforts to spur the economy, would take additional action if officials concluded no progress was being made towards higher levels of employment.
The number of people still receiving benefits under regular state programs after an initial week of aid edged up 1,000 to 3.31 million in the week ended July 7.