The number of Americans seeking jobless benefits rose more than expected last week, according the a weekly report from Washington, leaving economists wondering if the labor market is weakening or if there is still some overhang from the volatile holiday season.
Labor Department Data Show Rising Jobless Claims
The Labor Department reported Thursday morning that initial jobless claims increased by 19,000 to 348,000 for the week ended January 25, marking the highest level of claims in six weeks. Economists figured that claims last week would tally 329,000. Meanwhile, the week prior’s figure was moved to 329,000 from an original estimate of 326,000.
Economists are cautious about reading too much into the reports on jobless claims from mid-November through January because the holiday season can toss the numbers each week. With January winding down, some normalcy should be moving back into the report each week. Further, the bitter cold and snow that has blanketed much of the country could be adding to a rise in recent claims.
Claims for Louisiana were estimated for last week because of inclement weather, according to a Labor Department spokesman, but nothing there was nothing unusual in the data.
Winter Weather Blamed for December Jobs Report
Snow and ice were cited as part of the reason that economists brushed-off a poor jobs report earlier this month that showed the nation only added 74,000 jobs in December. After a two-day meeting concluded on Wednesday, the Federal Reserve said it was further reducing its monthly asset purchases as it still sees strength in the labor market, despite the poor jobs report. The central bank cut its purchases of Treasuries and mortgage-backed securities, a stimulus plan known as quantitative easing, by $10 billion per month in January. In February, the purchases are being trimmed to $65 billion each month.
The four-week moving average, less volatile measure of initial jobless claims because it flattens weekly undulations, eked up by 750 to 333,000. Even with the tepid climb, the one-month average is still near three-and-a-half year lows.
Continuing claims, or those people already receiving benefits through regular state plans, decreased by 16,000 to 2.99 million in the week ended January 18. Continuing claims are reported at a one-week lag to initial claims.
Total claims, or those people receiving benefits in all state and federal programs, dropped by 122,586 to 3.58 million in the week ended January 11. Total claims are delivered at a two-week lag. At the same time in 2013, total claims were 5.92 million.
The largest increases in initial claims for the week ending January 18 were in California (+11,708), Oregon (+1,239) and Rhode Island (+304). The largest decreases were in Pennsylvania (-16,595), Indiana (-10,740) and Texas (-8,789).
US Economy Expanding at Faster Clip
In a separate report from the nation’s capital, the Commerce Department said that the U.S. economy expanded by 3.2 percent in the fourth quarter. For all of 2013, gross domestic product, the broadest measure of goods and services produced across the country, improved by 1.9 percent from 2012. The gains were boosted by GDP growing at a 3.7-percent clip in the last six months of 2013, marking the best second half of a year since 2003.
Wall Street is in the green with the GDP news, trying to halt downward path that has seen the Dow Jones Industrial Average close in the red during six of the last seven sessions. In morning action, the Dow is up by 77 points, the S&P 500 is ahead 14 points and the Nasdaq has climbed 59 points.
