US jobless claims edge lower but trend points to uptick in filings

US jobless claims edge lower but trend points to uptick in filings

US Jobless claims
File photo of people attending a job fair in Los Angeles, California, on Jan 26, 2017. (REUTERS/Lucy Nicholson)

WASHINGTON: The number of Americans filing claims for jobless benefits edged lower last week, a positive signal for the US labour market amid recent signs that new claims may be trending slightly higher.

Initial claims for state unemployment benefits decreased 2,000 to a seasonally-adjusted 222,000 for the week ended Dec 28, the Labour Department said on Thursday (Jan 2).

Economists polled by Reuters had expected 225,000 new claims last week.

While claims have been volatile in recent weeks around the US holiday season and end of the year, longer-term averages suggest the strength in claims data may have ebbed slightly in recent months.

In the latest week, the four-week moving average of initial claims rose by 4,750 to 233,250, the highest level since January 2018.

Still, the underlying trend in claims remains consistent with a labour market that is resisting signs of weakness in other parts of the economy, such as a slowdown in US manufacturing and lacklustre business investment.

In November, claims were near a 50-year low.

US stock futures were little changed following the release of the jobless claims data, holding onto gains spurred earlier in the day by fresh economic stimulus from Beijing and optimism around easing trade tensions.

Economists have attributed the weakness in US manufacturing and investment to uncertainty around a US-China trade war launched under US President Donald Trump.

The drop in claims in the latest week unwound a surge in new claims three weeks earlier that appeared to reflect a late Thanksgiving Day this year compared to 2018. By the end of the latest week, the number of new claims was at its lowest since the Nov 30 week.

Labour market strength is underpinning consumer spending, keeping the economy on a moderate growth path despite headwinds from trade tensions and slowing global growth that have weighed on manufacturing.

In November, the US unemployment rate fell back to 3.5 per cent, the lowest in nearly half a century.

Thursday's claims report also showed the number of people receiving benefits after an initial week of aid rose 5,000 to 1.73 million for the week ended Dec 21.

Source: Reuters