First-time claims for U.S. unemployment benefits unexpectedly showed a modest increase in the week ended August 18th, according to a report released by the Labor Department on Thursday.
The report showed that initial jobless claims edged up to 372,000 from the previous week's revised figure of 368,000. The modest increase came as a surprise to economists, who had expected jobless claims to slip to 365,000 from the 366,000 originally reported for the previous week.
Additionally, the Labor Department said the less volatile four-week moving average crept up to 368,000 from the previous week's revised average of 364,250.
With the modest increase, the four-week moving average regained some ground after hitting a five-month low in the previous week.
Chris Low, chief economist at FTN Financial, said, "Claims are following a pattern very similar to last year's. They fell in Q1, rose in Q2, fell back in early Q3 and then rose again before a decisive drop to a new low in Q4."
"Stepping back, we see a general declining trend, but the annual pattern is marred by a soft patch every spring and a lack of clear direction every summer," he added.
The report also showed that continuing claims, a reading on the number of people receiving ongoing unemployment assistance, rose to 3.317 million in the week ended August 11th from the preceding week's revised level of 3.313 million.
The four-week moving average of continuing claims climbed to 3,311,500 from the preceding week's revised average of 3,305,000.
Low said, "For what it's worth, this week's data correspond to the payroll survey week and point to a further modest improvement (slowdown) in the rate of layoffs."
Earlier this month, the Labor Department released a report showing stronger than expected job growth in the month of July, although the report also showed an unexpected uptick by the unemployment rate.
The report said non-farm payroll employment increased by 163,000 jobs in July following a downwardly revised increase of 64,000 jobs in June. Economists had expected employment to increase by about 100,000 jobs.
Despite the job growth for the month, the unemployment rate edged up to 8.3 percent in July from 8.2 percent in June. The increase surprised economists, who had expected the unemployment rate to come in unchanged.
by RTT Staff Writer
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