Jobless claims jump by 31K, but hiring still strong
Jobless claims by US workers rose 31,000 to a seasonally adjusted 313,000, the most in six weeks. But the average for jobless claims has been near or below 300,000 since September, a historically low number that suggests companies are holding onto their staffs and may even be stepping up hiring.
Washington — More Americans sought unemployment aid last week, though the number of applications was still consistent with steady hiring.
The Labor Department said Thursday that weekly applications rose 31,000 to a seasonally adjusted 313,000, the most in six weeks. The four-week average, a less volatile measure, increased 11,500 to 294,500.
Applications are a proxy for layoffs. The average has been near or below 300,000 since September, a historically low number that suggests companies are holding onto their staffs and may even be stepping up hiring.
"Despite larger-than-expected weekly swings, the trend in claims remains consistent with an improving labor market," Derek Lindsey, an economist at BNP Paribas, said in a note to clients.
Jim O'Sullivan, an economist at High Frequency Economics, said the current four-week average is similar to the average in the final three months of last year. Employers added an average of 324,000 jobs each month in the fourth quarter.
Employers added more than 1 million jobs from November through January, the best three-month pace since 1997.
And more than 3.2 million jobs have been created in the past year. That has helped lower the unemployment rate to 5.7 percent in January from 6.6 percent 12 months earlier.
The strong job gains are showing some signs of finally lifting paychecks for more workers. Average hourly pay rose 0.5 percent in January, the most in six years, the Labor Department said earlier this month. While economists cautioned against reading too much into one month's figure, it suggested employers may finally feel the need to raise wages to attract new workers and keep the ones they have.
Big companies like Aetna and the Gap have already raised wages. Last week, Wal-Mart, the world's largest retailer, said it would raise the base pay for its employees to $9 an hour later this year and $10 next February. Retailer TJX followed with its own pay hike announcement Wednesday.
Federal Reserve Chair Janet Yellen said Tuesday that there has been broad improvement in the job market since last summer. Yet she also noted that "wage growth remains sluggish," and the number of Americans either working or looking for work is low by historical standards. The Fed is closely watching the jobs data as it considers when to begin raising short-term interest rates.
"Considerable progress has been achieved in the recovery of the labor market, though room for further improvement remains," Yellen said in testimony before a Congressional panel.