Some worried tepid wage gains mean it will longer to achieve full employment
WASHINGTON (Reuters) — The number of Americans filing new applications for unemployment benefits unexpectedly rose last week, but the trend remained consistent with solid labour market momentum that could keep the Federal Reserve on track to raise interest rates this year.
Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 277,000 for the week ended Aug. 15, the Labor Department said on Thursday.
Claims for the prior week were revised to show 1,000 fewer applications received than previously reported. Economists had forecast claims slipping to 272,000 last week. A Labor Department analyst said there were no special factors influencing the data and no states had been estimated.
Prices for U.S. Treasuries fell slightly after the data, while stock index futures were pointing to a lower open on Wall Street. The dollar dipped against a basket of currencies.
Minutes from the Fed's July 28-29 policy meeting published on Wednesday showed the U.S. central bank upbeat on improving labour market conditions, but worried about persistently tame inflation and a weak global economy.
Economists believe that policymakers' concerns about low price pressures have raised the bar for a September interest rate hike. Futures markets on Wednesday trimmed bets for monetary policy tightening next month.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, rose 5,500 to 271,500 last week.
It was the 21st straight week that the four-week average remained below the 300,000 threshold, which is usually associated with a strengthening labour market.
The claims data covered the week that the government surveyed employers for the non-farm payrolls portion of August's employment report. The four-week average of claims fell 7,000 between the July and August survey periods, suggesting another month of healthy job gains.
Payrolls increased by 215,000 jobs in July. So far this year, job gains have exceeded 200,000 in five out of seven months. At a seven-year low of 5.3 per cent, the unemployment rate is near the 5.0 per cent to 5.2 per cent range that most Fed officials think is consistent with full employment.
Wednesday's Fed minutes showed that "many members thought that labour market underutilization would be largely eliminated in the near term," but others worried that tepid wage gains could mean it would take longer to achieve full employment.
Thursday's claims report showed the number of people still receiving benefits after an initial week of aid fell 24,000 to 2.25 million in the week ended Aug. 8.