The number of applications for unemployment benefits unexpectedly increased last week, a sign labor market momentum may be starting to cool.
Initial jobless claims rose by 7,000 to 284,000 in the week ended Jan. 9, the second-highest level since July, a report from the Labor Department showed on Jan. 14. The median forecast in a Bloomberg News survey of economists called for a decline to 275,000.
Concerns that a slowdown in China and other emerging economies will limit prospects for U.S. growth have roiled equity markets and may make some employers more cautious about their staffing levels. A sustained pickup in the pace of dismissals that takes claims well above 300,000 will probably be needed to confirm demand for workers is waning.
“This time of the year claims are pretty volatile given the difficulty of trying to adjust for the various holidays and the start of the quarter,” said Kevin Cummins, an economist at RBS Securities Inc. in Stamford, Connecticut, whose forecast for claims was among the closest in the Bloomberg survey. “Our assumption is the labor market is going to remain healthy, just at a somewhat more moderate pace of job growth.”
Economists’ estimates in the Bloomberg survey for weekly jobless claims ranged from 270,000 to 310,000. The previous week’s figure was unrevised at 277,000. Factories and transportation and warehousing were among the industries with firings during that period ended Jan. 2.
While Puerto Rico estimated jobless claims last week, 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 278,750 from 275,750. The average was the highest since July.
The number of people continuing to receive jobless benefits rose by 29,000 to 2.26 million in the week ended Jan. 2. The unemployment rate among people eligible for benefits increased to 1.7% from 1.6%. 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.
Beginning in March of last year, claims dropped below 300,000, a level economists say represents robust labor-market conditions.
While a slowdown in the economy in the second half of 2015 may lead to a slight pickup in dismissals, layoffs can also reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Macy’s Inc. said Jan. 6 it will fire or relocate about 3,000 workers to match lower sales volume after the company suffered a worse holiday period than it expected.
The changes will affect three to four workers at each of about 770 Macy’s and Bloomingdale’s stores — about 2% of its total workforce — though half of those employees are expected to be offered other jobs.