(Bloomberg) -- Filings for U.S. unemployment benefits increased by more than expected to a seven-week high, a possible sign of strains in the labor market that could factor in to the Federal Reserve’s debate over whether to cut interest rates next month.
Jobless claims rose by 10,000 to 227,000 in the week ended June 22, according to Labor Department figures released Thursday that exceeded all estimates in Bloomberg’s survey of economists. The four-week average, a less-volatile measure, increased to 221,250, the highest in more than a month.
Key Insights
- The uptick in claims may heighten concerns about the strength of the labor market after job gains trailed estimates in May. Even so, the June employment report due next week will likely prove more important as it will provide a detailed picture ahead of Fed officials’ meeting in late July.
- The data may reflect some volatility related to the end of the school year, as Connecticut, Massachusetts and New Jersey all recorded large increases in unadjusted claims. In addition, figures for California were estimated, showing an unadjusted rise of 5,155.
- Even with the increase nationally, jobless claims remain near historically low levels as higher wages and low unemployment support consumer spending, which accounts for most of the economy.
What Our Economists Say
“Jobless claims rose more than expected, but weekly data tends to be volatile and only sustained increases could become worrisome. The four-week moving average, a less volatile measure, continued to hover near historic lows consistent with tight labor market conditions.”-- Eliza Winger, associateClick here for the full note.
Get More
- A separate government report Thursday showed the U.S. economy grew at a 3.1% annualized rate in the first quarter, the same as the previously reported estimate. Consumer spending, the biggest part of the economy, grew at a downwardly revised 0.9%, while business investment was revised higher.
- Continuing claims, which are reported with a one-week lag, rose by 22,000 to 1.69 million in the week ended June 15.
- The unemployment rate among people eligible for benefits held at 1.2%.
- Economists surveyed by Bloomberg had forecast that claims would rise to 220,000.
(Adds chart, Bloomberg Economics comment.)
©2019 Bloomberg L.P.