Ris­ing US job­less claims start­ing to worry economists

The Wichita Eagle - - Business - BY SCOTT LAN­MAN

The ris­ing num­ber of Amer­i­cans fil­ing for un­em­ploy­ment ben­e­fits is start­ing to worry some economists, though the lat­est in­creases came dur­ing hol­i­day pe­ri­ods typ­i­cally as­so­ci­ated with data volatil­ity.

Ini­tial job­less claims rose 10,000 last week to 234,000, the third straight gain and the high­est level since May, a La­bor De­part­ment re­port showed Thurs­day. The me­dian es­ti­mate in a Bloomberg sur­vey was for a de­crease to 220,000. The last two weeks in­cluded Thanks­giv­ing and Vet­er­ans Day, and fil­ings tend to show wider swings around such events.

“The weekly se­ries tends to be noisy, and the num­bers can be es­pe­cially choppy around the hol­i­days to­wards the end of the year, but the trend in the data clearly has de­te­ri­o­rated over the past cou­ple of months,” econ­o­mist Daniel Sil­ver of JPMor­gan Chase wrote in a note Thurs­day.

The re­cent rise may be con­sis­tent with fore­casts for some mod­er­a­tion in eco­nomic and job growth over time, “job­less claims are also an im­por­tant in­put into our re­ces­sion risk mon­i­tors, and con­tin­ued weak­en­ing in the data could be­come a more wor­ri­some sig­nal for the econ­omy,” Sil­ver said.

Jim O’Sul­li­van, chief U.S. econ­o­mist at High Fre­quency Eco­nom­ics, wrote in a note that “some of the rise could re­flect sea­sonal ad­just­ment chal­lenges,” yet there may also be a “sig­nif­i­cant weak­en­ing in de­mand for work­ers.”

“For now at least, the data add to the case” for Fed­eral Re­serve of­fi­cials “to be cau­tious about fur­ther tight­en­ing,” he said.

Michael Gapen of Bar­clays said in a note that the rise in claims is “con­sis­tent with the re­cent in­crease in fi­nan­cial mar­ket stress and the ebbing in fis­cal stim­u­lus.” He said it may also be linked to stresses in Cal­i­for­nia, New York and the in­dus­trial Mid­west – places with strong trade ties to China – that are feel­ing the “ef­fect of pro­tec­tion­ism, ac­tual or ex­pected.”

Among those who are less wor­ried is So­ci­ete Gen­erale econ­o­mist Omair Sharif, who wrote that the in­crease should be taken “with a large grain of salt.

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