U.S. jobless claims unexpectedly rise to more than one-year high

WASHINGTON – Applications for unemployment benefits unexpectedly increased last week to the highest level since February 2015, a sign progress in the U.S. job market is moderating.

Initial jobless claims rose by 20,000 to 294,000 in the week ended May 7, a report from the Labor Department showed Thursday. The median forecast of economists surveyed by Bloomberg called for a decline to 270,000.

The figures signal a more modest recovery lies ahead as companies adjust headcounts after a first-quarter slowdown in demand. Economists will continue to monitor claims data in the coming weeks before concluding that the labor market is taking a bigger step back.

The pickup in claims “will raise eyebrows, especially after last week’s weaker-than-expected payroll number,” Sophia Kearney-Lederman, an economic analyst at FTN Financial in New York, said before the report. “It’s something to keep an eye on, but not necessarily anything to panic about.”

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For 62 consecutive weeks claims have been below the 300,000 level that economists say is typically consistent with an improving job market. That’s the longest stretch since 1973. Applications in the previous week were unrevised at 274,000.

No states estimated filings for jobless benefits last week and there was nothing unusual in the data, according to the Labor Department.

The four-week moving average of claims, a less volatile measure than the weekly figures, increased to 268,250 from 258,000.

Continuing claims
The number of people continuing to receive jobless benefits rose by 37,000 in the week ended April 30, the biggest increase since the end of November, to 2.16 million. The unemployment rate among people eligible for benefits held at 1.6 percent. These data are reported with a one-week lag.

Initial jobless claims reflect weekly firings, and a sustained low level of applications has typically coincided with faster job gains. Layoffs can also reflect company- or industry-specific causes, such as cost-cutting or business restructuring.

A report last week showed that U.S. employers added 160,000 workers to their payrolls in April, the fewest since September and well below economists’ median forecast.

Another report from the Labor Department showed import prices rose 0.3 percent for a second month in April, largely reflecting a pickup in petroleum and food. While industrial supply costs increased, prices declined for consumer and capital goods made overseas.

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