Unexpected Jobless Claims Jump Is Biggest in 9 Weeks

The number of U.S. workers applying for state unemployment benefits unexpectedly rose last week, the government said Thursday. The increase in first-time jobless claims is the largest in nine weeks and a sign of slower job growth that could ease concerns of inflation-wary Federal Reserve Board policymakers.

First-time claims rose by 8,000 to a seasonally adjusted 315,000 for the week ended Saturday, the second consecutive weekly rise, the Labor Department said. That’s the highest level since the week ended Aug. 30, when claims totaled 325,000. Analysts’ had expected the number of new claims to hold steady at 306,000.

Initial claims had remained below 310,000 for more than a month, the longest sustained run at that low level since 1988. An increase above that “shows perhaps a little weakness,” said Cary Leahey, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, N.Y.

However, “anything below 325,000 is still a strong number,” suggesting job gains of about 200,000 in October, he said.

Claims increased by a revised 3,000 in the previous week to 307,000, initially reported as a gain of 2,000 to 306,000. Meanwhile, the four-week average for jobless claims, a less volatile measure of employment conditions, rose last week to 308,750 from 306,500 the previous week. , the Labor Department said.

Analysts said the latest claims report takes a bit of the edge off the concern expressed by Fed Chairman Alan Greenspan and his colleagues that the rate of job growth could eventually push wages and prices higher. “The performance of the labor markets this year suggests the economy has been on an unsustainable track,” Greenspan told Congress earlier this month.

The Labor Department also said the total number of people on the unemployment rolls increased by 15,000 to 2.261 million for the week ended Oct. 11. At the same time, 44 states or territories reported an increase in new jobless claims, while nine said such claims fell.

The insured unemployment rate was unchanged at 1.9%. That rate measures the number of people receiving benefits divided by the number of workers covered by the program. Reports on the total number of unemployed workers continuing to receive benefits and state-by-state data are reported with a one-week lag.

Through the week ended Saturday, initial claims have averaged 323,000 this year--below last year’s average of 351,000.