Initial jobless claims unexpectedly jump to nine-month high

Initial jobless claims jumped for 2nd straight week to a nine-month high, but weather might be the culprit

Initial jobless claims unexpectedly jumped to a nine-month high last week, an indication that severe winter weather could be putting a temporary freeze on the labor market's recovery.

About 320,000 people filed for first-time unemployment benefits last week, up 7,000 from the previous week, the Labor Department said Thursday.

Economists had been expecting claims to fall to 300,000. Claims below that level indicate a strong labor market.

In another read on the jobs market, planned layoffs by U.S. businesses were down 5%, to 50,579, in February from the previous month, career counseling firm Challenger Gray & Christmas Inc. said Thursday.

But announced layoffs are running higher this year than last year, the firm said.

The weekly jobless claims figure can be volatile, but last week was the second straight jump and brought claims to their highest level since May.

The less-volatile four-week average rose by 10,250, to 304,750.

The recent upward trend probably was caused by bad winter weather, particularly in the eastern U.S., said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Snowstorms can lead some businesses to temporarily lay off workers.

Claims have been running below 300,000 for most of the previous six months as job growth has picked up.

The new data come after a below-expectations report on private-sector job growth Wednesday from payroll firm Automatic Data Processing.

Those figures could signal that the February jobs report, due to be released Friday by the Labor Department, will fall short of forecasts.

Economists already had been expecting the pace of job growth to be down from January's robust 257,000 figure.

They have forecast the Labor Department report would show that the economy added a solid 230,000 net new jobs last month and that the unemployment rate ticked down to 5.6%.

Although planned job cuts were down in February from the previous month, they were up 21% from a year earlier, the Challenger report said.

February was the third straight month that the figure was running higher than a year earlier. The energy industry, hit by falling oil prices, announced the most job cuts in February with 16,339, the report said.

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Copyright © 2016, Los Angeles Times

UPDATE

7:05 a.m.: This article has been updated with data on planned job cuts provided by Challenger Gray & Christmas.

This article was originally posted at 6:29 a.m.

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