The number of new applications for unemployment benefits climbed 18,000 last week to 206,000, more than anticipated.
While Thursday’s numbers, reported by the Labor Department, were higher than anticipated, they still reflect a general downward trajectory of new claims throughout the year. Claims were consistently above 600,000 each week earlier this year. Initial jobless claims, which are watched closely by government officials and investors because they are a proxy for layoffs, have dropped as the labor market has improved and fewer people require economic assistance from the government.
The week before, new claims for unemployment hit the lowest level in 52 years, a sign that layoffs are very rare as employers try hard to hold on to workers.
“As expected, seasonally adjusted new jobless claims have risen a bit from the recent low level. ‘Tis the season for some bumps in the statistical road related to seasonal adjustment,” said Mark Hamrick, Bankrate’s senior economic analyst.
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The encouraging jobless claims reports ease the sting from the weak monthly November jobs report. The economy added just 210,000 new jobs in November, much fewer than the half-million expected.
The jobless claims are the strongest indication that the labor market is moving toward full health. The Federal Reserve is working to balance signs that the jobs recovery still has far to go with indications that inflation is too high. Consumer prices increased 6.8% for the year ending November — the fastest pace of inflation in 39 years. In response, the Fed on Wednesday announced that it will likely move to raise interest rates at least three times next year.
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The central bank also released its updated projections for the country’s gross domestic product. Fed members revised down their GDP predictions from 5.9% in 2021 to 5.5% and changed their growth forecast from 3.8% to 4% for next year.
