Jobless claims increase

Labor Department says new unemployment claims rose by smaller-than-expected 17,000.

January 12, 2006: 8:39 AM EST



WASHINGTON (Reuters) - The number of U.S. workers making new claims for unemployment benefits rose by a slightly smaller-than-expected 17,000 last week, government data showed Thursday.

The Labor Department said 309,000 initial claims for state jobless aid were filed in the week ended Jan. 7 versus a revised 292,000 the prior week. The prior week's tally -- which was revised from an initially reported 291,000 -- remained the smallest in five years after an unusually steep decline in claims.

 

Wall Street economists had forecast initial claims would rise to 315,000, partly in payback for the previous week.

The four-week moving average of initial claims, which smoothes weekly volatility for a more reliable indication of underlying trends in the labor market, fell by 5,500 to 311,500, its lowest level since the week of Aug. 6, when it stood at 310,250.

The report also showed that the number of people still on the jobless rolls after an initial week of claims increased by 12,000 to 2.70 million in the week ended Dec. 31, the latest for which these data are available. Wall Street economists had forecast continued claims to come in at 2.69 million.

The weekly claims jump followed mixed news from the jobs market in December, when the U.S. economy created an unexpectedly weak 108,0000 new jobs while November's numbers were revised up strongly to a rise of 305,000 hires. The U.S. jobless rate declined to 4.9 percent in December from 5 percent the previous month.

Federal Reserve officials believe strong U.S. growth has lifted the economy close to full employment -- a theoretical concept indicating the lowest level of unemployment the United States can sustain without triggering wage inflation.