New claims for unemployment benefits rose unexpectedly last week, popping above 400,000 for the first time in just over a month and reinforcing the view that the battered labor market was healing only slowly.
KEY POINTS: * Initial claims for state unemployment benefits climbed to a seasonally adjusted 402,000 from an upwardly revised 396,000 in the prior week, the Labor Department said on Thursday. * Economists polled by Reuters had forecast claims at 390,000.
GARY THAYER, CHIEF MACRO STRATEGIST, WELLS FARGO ADVISORS, ST. LOUIS, MISSOURI:
There was an uptick in jobless claims after seeing a declining trend. We need to watch claims closely. If claims start to rise from here it would not be a good sign for the economy. But other indicators at this point suggest the economy is doing a little better so maybe we should not read too much into this. We also saw an uptick in continuing claims data. The ADP numbers out earlier this week suggested the labor market was stabilizing and maybe improving a bit. The claims numbers this morning don't nullify that, but they might create a little doubt before tomorrow's numbers.
PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK:
Jobless claims are not falling. They're not in a danger zone, but the trend is not becoming healthier. There's an upward revision to the continuing claims for the payroll survey week that is important for Friday's monthly employment data. There's no longer a decline in the number of people receiving unemployment checks; in fact there's an increase. So enthusiasm about the ADP result will be contained.
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS:
The number of people filing their first claim for unemployed benefits increased for the second week in a row, up to 402,000 in the week ending November 26. The gain of 6k comes after one of 4k, and contrasts with expectations for filers to have to fallen 390k. The moving average is still in good shape despite two weeks of movement upwards, at 395,750 it's just 500 claims more than last week's average.
Unadjusted claims did fall (by 70k), but not to the extent to reduce the seasonally adjusted level. In fact, had NSA claims dropped by just 5k or 6k more (a revision that could be seen next week), initial claims would have been unchanged. Even though the recent inclines (a net of 10k) push the reading past 400k, claims' movement has been improving. Looking at its moving average, which does not fluctuate as strongly as the initial count, the sub-400k average has held for three weeks, and it's still better than the averages touching 420k in September.
Those still seeking benefits also increased for the second week, with a reading of 3.74mln filers in the week ending November 19. This gain of 35k comes after one of 85k. These two increases totaling 117k slightly trump the two weeks of decline which had pulled these types of filers down by 84k. Regardless, the level has not drifted too far from 3.7 mln for majority of the year. Continuing moving average exhibits such, as it moved from 3.675 mln to 3.683 mln.