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U.S. Jobless Claims Pull Back Less Than Expected To 234,000

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First-time claims for U.S. unemployment benefits pulled back in the week ended February 2nd after the jump seen in the previous week, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims fell to 234,000, a decrease of 19,000 from the previous week's unrevised level of 253,000. Economists had expected jobless claims to drop to 221,000.

The smaller than expected decrease came after jobless claims rebounded to their highest level since September of 2017 in the previous week.

The Labor Department said the less volatile four-week moving average rose to 224,750, an increase of 4,500 from the previous week's unrevised average of 220,250.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, slid by 42,000 to 1.736 million in the week ended January 26th.

The four-week moving average of continuing claims still edged up to 1,741,250, an increase of 4,250 from the previous week's revised average of 1,737,000.

Last Friday, the Labor Department released a separate report showing much stronger than expected job growth in the month of January, although the report also showed a substantial downward revision to the pace of job growth in December.

The Labor Department said non-farm payroll employment surged up by 304,000 jobs in January compared to economist estimates for an increase of about 165,000 jobs.

However, the report also showed the spike in employment in the previous month was downwardly revised to 222,000 jobs from the initially reported 312,000 jobs.

Andrew Hunter, Senior U.S. Economist at Capital Economics, said the jump in employment in January still provides "further evidence that economic growth remains solid and that the government shutdown had little impact."

Despite the strong job growth, the unemployment rate unexpectedly inched up to 4.0 percent in January from 3.9 percent in December. Economists had expected the unemployment rate to be unchanged.

The unemployment rate ticked up to its highest level since last June, as the household survey measure of employment showed a decrease of 251,000 due to a rise in workers on temporary layoff as a result of the government shutdown.

Meanwhile, the report said average hourly employee earnings rose by 3 cents to $27.56 in January, reflecting a 3.2 percent increase compared to the same month a year ago. The annual rate of growth slowed from 3.3 percent in December.

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