US initial jobless claims rise more than expected

The number of Americans filing for unemployment benefits rose more than expected last week, according to data from the Labor Department.

Jobless claims were up 21,000 from the previous week’s unrevised level to 231,000, hitting their highest level in six weeks. Economists had been expecting a smaller increase to 220,00.

Meanwhile, the four-week moving average came in at 222,500, up 2,000 from the previous week's unrevised average.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

The Labor Department said claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "A combination of less-friendly seasonal factors and unadjusted numbers pushed claims up sharply this week, but the trend in claims continue to decline. The four- and eight-week averages are now just 222.5K and 223.9K, more than 20K lower than six months ago.

"The claims numbers are noisy, but this is not noise. Firms can't find all the people they want to hire, so the bar for letting people go has risen. Employers don't want to over-react to modest dips in demand, because re-hiring people is now extremely difficult. With labour demand still very strong, the claims numbers are consistent with 200K-plus increases in payrolls for the foreseeable future."