June 13, 2019
WASHINGTON (Reuters) – The number of Americans filing applications for unemployment benefits unexpectedly rose last week, which could add to concerns that the labor market was losing steam after job growth slowed sharply in May.
Initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 222,000 for the week ended June 8, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported.
Economists polled by Reuters had forecast claims decreasing to 216,000 in the latest week. The Labor Department said no states were estimated. While layoffs remain relatively low, the third straight weekly increase in claims suggests some softening in labor market conditions.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, increased 2,500 to 217,750 last week.
The economy created only 75,000 jobs in May, with annual wages increasing at their slowest pace in eight months, the government reported last week.
The slowdown in hiring, which occurred before a recent escalation in trade tensions between the United States and China, raised fears of a sharp deceleration in economic growth. The claims data is being closely monitored for signs of any fallout from the trade war.
President Donald Trump in early May imposed additional tariffs of up to 25% on $200 billion of Chinese goods, prompting retaliation by Beijing. Trump on Monday threatened more duties on Chinese imports if no deal was reached when he meets Chinese President Xi Jinping at a G20 summit later this month in Japan.
A tariff on all goods from Mexico to force authorities in that country to stop immigrants from Central America from crossing the border into the United States was narrowly averted after the two nations struck an agreement late on Friday.
Data so far have suggested a sharp slowdown in U.S. economic growth in the second quarter after a temporary boost from exports and an accumulation of inventory early in the year. In addition to the sharp moderation in hiring last month, manufacturing production, exports and home sales dropped in April, while consumer spending cooled.
The Atlanta Fed is forecasting gross domestic product increasing at a 1.4% annualized rate in the April-June quarter. The economy grew at a 3.1% pace in the first quarter.
Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid increased 2,000 to 1.70 million for the week ended June 1. That was the highest level since March. The four-week moving average of the so-called continuing claims rose 7,750 to 1.68 million.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci)