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Jobless claims up 4,000 last week
September 13, 2007 / 12:31 PM / 10 years ago

Jobless claims up 4,000 last week

<p>A man walks by a sign advertising a job vacancy in this undated file photo. The number of workers signing up for jobless benefits edged up a smaller-than-expected 4,000 last week, a government report showed on Thursday. REUTERS/ File</p>

WASHINGTON (Reuters) - The number of workers signing up for jobless benefits edged up a smaller-than-expected 4,000 last week, suggesting resilience in labor markets, a government report showed on Thursday.

Initial claims for state unemployment insurance rose to a seasonally adjusted 319,000 for the holiday-shortened week ended September 8, from a downwardly revised 315,000 the prior week, the Labor Department said.

The week included the Labor Day holiday, and while the claims data is seasonally adjusted, it can be difficult to adjust around holidays.

Analysts polled by Reuters were expecting claims to rise to 325,000 from the previously reported 318,000.

The report somewhat tempered hopes for an aggressive interest rate cut by the Federal Reserve next week, helping send U.S. Treasury debt prices lower as stocks rose in response to company news. The dollar rebounded modestly against the euro.

Analysts said these latest claims numbers pointed to more steadiness in the labor market than last week’s August unemployment report, which showed that the economy shed jobs for the first time in four years.

“This is giving hope that the economy isn’t as bad. It translates that the consumer is still there, which is very important to the whole process,” said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey.

The four-week moving average for initial claims, which irons out week-to-week volatility, dipped to 324,000 from 325,000.

The latest jobless claims figures came after the government reported last Friday that non-farm employers trimmed payrolls by 4,000 jobs in August, raising expectations that the Federal Reserve would reduce interest rates to help boost the economy amid turmoil in the housing and mortgage markets.

Markets are awaiting retail sales and industrial production reports on Friday for more conclusive evidence about whether turmoil in these markets has exacted a significant toll on the broader economy.

A narrowing in the U.S. trade deficit in June on strong exports suggested the economy is in a position to weather some of the shocks of the housing market downturn.

The Federal Reserve’s interest-rate setting Federal Open Market Committee is scheduled to meet September 18.

Financial markets expect the U.S. central bank, which has said it stands ready to act as needed to limit the adverse effects of financial turbulence on the broader economy, to trim the benchmark federal funds rate by at least a quarter-percentage point next week.

The Labor Department said on Thursday that the number of unemployed still on the benefit rolls after drawing an initial week of aid fell by 6,000 to 2.585 million, for the week ended September 1, the latest period these figures were available. That was in line with expectations.

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