The number of Americans filing for unemployment benefits rose more than expected last week. However, it still hasn’t changed the perception that the labor market continues to improve and return to pre-recession levels.
Initial claims, which is a description for layoffs, for state unemployment benefits rose by 17,000, which is a seasonally adjusted 298,000 for the week ending Dec. 27. The Department of Labor said this was the first increase in jobless benefits following four consecutive weeks of declines.
According to Reuters and Wall Street Journal polls of economists, forecast claims stood at 290,000. Experts say that claims are a lot more volatile throughout the Christmas season.
This past summer, initial jobless claims dipped below the 300,000 threshold and have remained at this figure consistently since then. Prior to this year’s gains, the previous time initial claims had stayed at the 300,000 mark was before 2006.
In regards to a share of Americans who are covered under unemployment insurance, the number of new jobless claims is hanging around all-time lows. This means that the labor market is suggesting that Americans are less likely to get laid off than ever before. However, there are other factors to study showing that workers are still facing a tough job market.
Although monthly job creation is reaching 1999 levels, the number of people hired each month is still rock bottom during the economic recovery. Furthermore, the percentage of working-age adults seeking out employment opportunities is at a 36-year low, a signal that the demand for labor still hasn’t recovered.
Due to this troubling statistic, the Federal Reserve has said that this type of under utilization of the American labor force is cause to keep interest rates at near zero, a monetary policy that has been consistent for the past several years.
The U.S. unemployment rate is 5.9 percent. It is expected the federal government will report next week that the jobless number has dipped to 5.7 percent.