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U.S. Weekly Jobless Claims Jump To Two-Year High Due To Harvey

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Following last Friday's disappointing monthly jobs report, the Labor Department released a report on Thursday showing a sharp increase in first-time claims for U.S. unemployment benefits in the week ended September 2nd.

The report said initial jobless claims jumped to 298,000, an increase of 62,000 from the previous week's unrevised level of 236,000. Economists had expected jobless claims to rise to 241,000.

With the much bigger than expected increase, jobless claims reached their highest level since a matching figure in April of 2015.

The spike in jobless claims was primarily due to the impact of Hurricane Harvey, which led to widespread devastation and flooding in Texas.

"It is possible that claims could jump again for the week ending September 9, if flood waters prevented some laid-off workers from filing," said Gus Faucher, PNC Chief Economist. "But claims so far suggest that the hit to the national job market from Harvey will be limited."

"Monthly job growth weakened in the wakes of Katrina and Sandy, but did not outright decline," he added. "There is also the possibility of additional job losses tied to Hurricane Irma, which may hit Florida over the next few days."

The Labor Department said the less volatile four-week moving average of claims climbed to 250,250, an increase of 13,500 from the previous week's unrevised average of 236,750.

Meanwhile, the report said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, dipped by 5,000 to 1.940 million in the week ended August 26th.

The four-week moving average of continuing claims also fell to 1,948,250, a decrease of 4,000 from the previous week's revised average of 1,952,250.

Last Friday, the Labor Department released a separate report showing much weaker than expected job growth in the month of August.

The Labor Department said non-farm payroll employment climbed by 156,000 jobs in August compared to expectations for an increase of about 180,000 jobs.

The report also said the job growth in June and July was downwardly revised to 210,000 jobs and 189,000 jobs, respectively, reflecting a net downward revision of 41,000 jobs.

Reflecting the weaker than expected job growth, the unemployment rate inched up to 4.4 percent in August from 4.3 percent in July. Economists had expected the unemployment rate to remain unchanged.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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