The number of U.S. workers filing new claims for jobless benefits rose roughly as expected last week, but the data was distorted by an unusual pattern of layoffs in the automotive industry.
Initial claims for state unemployment insurance rose by 30,000 to a seasonally adjusted 554,000 in the week ended July 18, the Labor Department said on Thursday. Analysts polled by Reuters had expected claims to increase to 550,000 from a previously reported 522,000.
A Labor Department official said there were more layoffs than anticipated based on past experience in the automotive sector and elsewhere in manufacturing, following two weeks when there had been fewer layoffs.
Because the department uses past history to try to smooth out the impact of seasonal patterns, this amplified the rise in claims last week. Actual claims fell by less than expected, in part because they had risen by less than anticipated in the previous two weeks.
U.S. stocks index futures held gains, while prices for U.S. government bonds slipped and the euro rose against the dollar after the data was released.
Economists cautioned the seasonal adjustment problems made it hard to accurately determine the underlying trend, but they said a big drop in claims earlier this month hinted the pace of layoffs was slowing.
I do think it tells you there's a trend involved here. I wouldn't say the economy's necessarily improving, but it's not getting worse. And maybe it is improving slightly, ever so slightly, said Robert MacIntosh, chief economist at Eaton Vance Corp in Boston.
So-called continued claims of people still on jobless aid after an initial week of benefits fell by 88,000 to 6.225 million in the week ended July 11, the latest for which data is available. Analysts had expected continued claims to be 6.32 million.
In another gauge of labor market health, the 4-week moving average for new claims fell to 566,000 from 585,000 the previous week. This measure is closely watched because it is supposed to iron out weekly volatility. It has now fallen for four straight weeks.
(Reporting by Alister Bull, editing by Neil Stempleman)