Jobless benefits sign-ups increase

Applications up 14,000 to 266,000

The number of Americans who filed for unemployment benefits last week rose from a three-month low, consistent with the Federal Reserve's view of a stronger job market.

Unemployment claims increased by 14,000 to 266,000 in the week that ended Saturday, a Labor Department report showed Thursday in Washington. The median forecast in a Bloomberg survey called for 262,000 applications. The less-volatile four-week average dropped to remain at the second-lowest level since 1973.

Hiring managers are reluctant to pare jobs as the labor market tightens and demand continues to expand in the face of subdued global growth prospects. Fed policymakers on Wednesday acknowledged a rebound in June employment and took a step toward raising interest rates before year-end.

"Claims at this point are telling you that you're really near full employment," said Brett Ryan, an economist at Deutsche Bank Securities Inc. in New York. "There's no evidence that layoffs are picking up. The labor market's chugging along."

Estimates in the Bloomberg survey ranged from 245,000 to 275,000. The Labor Department revised the prior week's reading to 252,000 from an initially reported 253,000.

Filings have been below 300,000 for 73 straight weeks -- the longest stretch since 1973 and a level economists say is typically consistent with a healthy labor market.

While there was nothing unusual in the data, claims were estimated for Hawaii and Puerto Rico, according to the Labor Department.

The four-week average of unemployment-benefits claims dropped by 1,000 to 256,500.

The number of people continuing to receive jobless benefits rose by 7,000 to 2.14 million in the week ending July 16. The four-week average declined to the lowest level since November 2000.

Payrolls climbed in June by 287,000, the most since October, after a two-month lull. The unemployment rate edged up to 4.9 percent from 4.7 percent as more people entered the labor force.

Economists project payroll gains will ease in July to a 175,000 pace, in line with the 172,000 monthly average so far in 2016, according to the median estimate in a Bloomberg survey ahead of the Aug. 5 Labor Department report.

Some Federal Reserve policymakers think the U.S. has reached full employment.

That's a message hidden in Wednesday's statement by the Federal Open Market Committee, analysts said.

In describing the jobs market, the committee chose not to refer to "underutilization of labor resources"-- a phrase it has used in the past to suggest the U.S. was still short of maximum employment. Instead, it pointed to "some increase in labor utilization."

"Admittedly, this could be described as nit-picking, but I wonder if the change in orientation is an effort to refocus attention on the degree of labor market slack, or in this case the lack thereof," Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a note to clients.

At 4.9 percent in June, the unemployment rate was within the 4.7 to 5 percent range that most Fed policymakers peg as being equivalent to full employment -- or the long-term natural unemployment rate.

Fed Chairman Janet Yellen in the past has argued that the joblessness rate did not present a full picture of labor market conditions because it did not capture slack evident elsewhere. In particular, she's pointed to depressed levels of labor force participation and the large number of part-time workers who would prefer full-time employment.

Yet in a June 6 speech, Yellen said "the economy is now fairly close to the FOMC's goal of maximum employment," referring to the Federal Open Market Committee.

Business on 07/29/2016

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