WASHINGTON -- The number of Americans filing new claims for unemployment benefits
unexpectedly rose last week, but not enough to suggest a shift in the recent pattern of modest job gains. Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 354,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 4,000 more applications received than previously reported.
Economists polled by Reuters had expected first-time applications to hold steady at 340,000 last week. A Labor Department analyst said claims for five states, including Virginia, Minnesota and Oregon, were estimated since state offices had less time to prepare data because of the national holiday on Monday. This could have the distorted the readings, making last week's claims a less useful gauge of labor market trends.
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The four-week moving average for new claims, which irons out week-to-week volatility, edged up 6,750 to 347,250. Despite the rise last week, claims remained in the middle of their range for this year and below levels economists normally associate with modest job gains.
There is still no sign of layoffs related to belt-tightening in Washington, particularly the $85 billion in across-the-board government spending cuts which has slowed factory production. Steady improvement in labor market conditions and rising house prices are helping to sustain consumer spending, limiting the impact of the drag from fiscal policy on the economy.
The economy's unexpected show of resilience has fueled speculation that the Federal Reserve could start scaling back its monetary stimulus by the end of the year, pushing up government bond yields.
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Fed Chairman Ben Bernanke said last week that a decision to start tapering the $85 billion in bonds the U.S. central bank is buying each month could come at one of its "next few meetings" if the economy appeared set to maintain momentum. The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 63,000 to 2.99 million in the week ended May 18. The so-called continuing claims covered the week of the government's household employment survey from which the unemployment rate is calculated.
Continuing claims have dropped 21,000 between the April and May household survey week, which could see the jobless rate holding at an almost 4-1/2 year low of 7.5 percent.