Number of Jobless Claims Rises More Than Expected
Reuters (NY Times) February 2016
WASHINGTON — The number of Americans filing for unemployment benefits rose more than expected last week, the Labor Department said on Thursday, suggesting some loss of momentum in the labor market during a sharp economic slowdown and stock market sell-off.
Signs of creeping employment weakness were also flagged by another report on Thursday showing a 218 percent jump in announced job cuts by employers in January. The planned layoffs at companies based in the United States were concentrated in the energy and retail industries.
“The labor market may be past its peak for this cycle,” said Chris Rupkey, chief economist at MUFG Union Bank in New York. “It looks like the labor market has scaled back its rapid advance last month.”
Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 285,000 for the week that ended Jan. 30, the Labor Department said. Claims remained below 300,000, a level associated with strong labor market conditions, for a 48th week. That is the longest run since the early 1970s.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,000 to 284,750 last week. Economists had forecast claims rising to 280,000 in the latest week.
The rise in layoffs came during a slowdown in economic growth. The economy grew at only a 0.7 percent annual pace in the fourth quarter, held back by the headwinds of a strong dollar and faltering global demand.
A downturn in capital spending by energy companies, reeling from a collapse in oil prices, and inventory cutting by businesses are also constraining growth. At the same time, a stock market rout set off by fears of a global economic slump has caused financial market conditions to tighten.
In a separate report, the global outplacement consultancy Challenger, Gray & Christmas said employers reported 75,114 planned job cuts last month, up from December’s 15-year low of 23,622. January’s planned layoffs were the most since July.
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