by Lyle Adriano
The number of Americans who filed applications for jobless benefits in the week ending November 7 remained unchanged from the previous week’s unrevised reading of 276,000.
The figure was up 16,000 from the week ending October 24.
Market expectations pointed towards a soft decline to around 270,000 in the latest week.
With a continuingly tight labour market, the Federal Reserve might be roused into raising interest rates.
The four-week moving average of initial claims increased from the previous week’s 262,750 to 267,750. On the other hand, continuing claims for the week ending October 31 surged by 5,000 to 2,174,000.
The initial claims failed to reverse any unexpected increases from the previous week. The current level, however, suggests a tight labour market. Despite rising to its highest level since late September 2015, the four-week moving average remained at or even lower than the lows posted earlier this year.
Low records of multi-decade claims in October were accompanied by a significant rebound in job growth, with the payroll employment report revealing a 271,000 increase in the month. This reading was up from 137,000 in September and 153,000 in August.
The modest increase in claims implies that that October’s outsized increase will not be making a return anytime soon.
The Royal Bank of Canada expects job growth to moderate as the US economy nears full employment.
Those who advocate for higher rates say that long periods of low interest rates have made economic bubbles possible, particularly the 2007 real estate bubble. Advocates insist that recessions are a painful necessity, helping purge the economy of any risky and unsustainable investments.