U.S Weekly Initial Unemployment Claims Intensifies

The number of Americans filing for unemployment benefits rose more than expected last week, hitting their highest level in five months, but the underlying trend remained consistent with a strengthening labor market.

In the week ending November 26, the advance figure for seasonally adjusted initial claims was 268,000, an increase of 17,000 from the previous week's unrevised level of 251,000. The 4-week moving average was 251,500, an increase of 500 from the previous week's unrevised average of 251,000.

Despite the increase, claims remained below the 300,000 threshold, which is associated with a healthy labor market, for the 91st straight week. That is the longest run since 1970, when the labor market was much smaller.

“Taken together, labor market indicators show an economy that is on solid footing and close to our mandate of maximum employment,” Federal Reserve governor Jerome Powell said Tuesday during a speech in Indianapolis.

A Labor Department analyst said there were no special factors influencing last week's data and that no states had been estimated. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, edged up 500 to 251,500 last week.

The strong labor market, viewed as being at or near full employment, combined with signs of a firming economy and steadily rising inflation are expected to encourage the Federal Reserve to hike interest rates at its Dec. 13-14 policy meeting.

The U.S. central bank raised its benchmark overnight interest rate last December for the first time in nearly a decade.

Thursday's claims report also showed the number of people still receiving benefits after an initial week of aid increased 38,000 to 2.08 million in the week ended Nov. 19. The four-week average of the so-called continuing claims rose 12,750 to 2.04 million.

“As the last few weeks demonstrate, we are in the midst of a time of the year when weekly readings tend to exhibit above-normal volatility that reflects noise rather than signal,” Amherst Pierpont Securities chief economist Stephen Stanley said in a note to clients. “Thus, we should brace for these types of swings all the way until Presidents Day in February.”

The USD/JPY pair failed to extend its recovery momentum from session low and remained in negative territory following the release of US weekly jobless claims data.