WASHINGTON - The number of workers filing new applications for jobless insurance unexpectedly rose last week, according to government data on Thursday that still suggested the labor market was improving.
Initial claims for state unemployment benefits climbed 7,000 to a seasonally adjusted 480,000 in the week ended December 12 from a slightly downwardly revised 473,000 in the prior week, the Labor Department said. It was the second straight week initial claims rose.
Analysts polled by Reuters had forecast claims falling to 465,000 from a previously reported 474,000. The weekly claims data covers the December payrolls survey week.
A Labor Department economist said given that actual claims had not declined by as much as the seasonal factors had expected, the seasonally adjusted number increased a little bit.
Overall, the labor market is recovering, although the last two jobless claims numbers suggest that the pace is still fairly gradual, said Vassili Serebriakov, senior currency strategist at Wells Fargo in New York.
U.S. Treasury debt prices extended gains on the report, while the dollar trimmed gains versus the yen. U.S. stock index futures held their losses.
The Federal Reserve on Wednesday left overnight lending rates unchanged near zero and renewed its promise to hold them low for an extended period. The U.S. central bank noted that the labor market deterioration was abating, though companies remained reluctant to add to payrolls.
Things are still tough out there in the labor market. The Fed's decision to stand pat yesterday and keep rates low for an extended period was a good one, said Jamie Cox, managing partner at Harris Financial Group in Colonial Heights, Virginia.
Analysts reckon the job market, the worst-hit sector during the worst recession in 70 years, is starting to turn around and employers last month cut the fewest jobs in more than a year.
The four-week moving average for new claims fell 5,250 to 467,500 last week, the lowest level since September 2008, and dropping for the 15th week in a row. The four-week moving average is viewed as a better gauge of underlying trends as it irons out week-to-week volatility.
According to analysts, the four-week moving average needs to drop below 450,000 to indicate labor market stability.
The number of workers still collecting benefits after an initial week of aid rose 5,000 to 5.19 million in the week ended December 5. This was above market expectations for 5.15 million. So-called continuing claims are below their peak of 6.9 million in June.
The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, was unchanged at 3.9 percent in the week ended December 5.
(Additional reporting by Gertrude Chavez-Dreyfuss and John Parry in New York; Editing by Andrea Ricci)