More Americans than forecast lined up for new jobless benefits last week, the Labor Department said on Thursday. The increase almost erased the drop in claims seen in the prior two weeks.
In the week ending Jan. 26, applications for unemployment insurance payments increased by 38,000, the most since Nov. 10, to a seasonally adjusted 368,000. Economists polled by Reuters had forecast that claims would rise to 351,000 last week. Initial claims from two weeks ago were unrevised at 330,000.
Claims tend to be volatile at the start of the year. Last week’s increase followed a combined drop of 45,000 claims in the previous two weeks.
The four-week moving average, which normally provides a better indication of the underlying trend in labor markets than the weekly number of jobless claims, rose by 250 to 352,000 for first-time benefit applicants.
The number of people filing for benefits after an initial week of aid rose by 22,000 to 3.2 million in the week ending Jan. 19. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Job gains are of great importance, because they lead to income growth, and that supports consumer spending, which accounts for more than 70 percent of the U.S. economy.
The Labor Department will release the January jobs data on Friday at 8:30 a.m. EST. Economists surveyed by Thomson Reuters expect nonfarm payrolls to show a gain of 160,000, after a 155,000 December increase. Over the past two years, employment growth averaged 153,000 per month.
A 160,000 increase in payroll employment in January would maintain the pickup in jobs growth that was seen in the second half of last year without being strong enough to significantly reduce the unemployment rate from December’s 7.8 percent.