U.S. jobless claims rise to four-month high

December PPI down 0.3%, jobless claims 316,000
December PPI down 0.3%, jobless claims 316,000

The number of Americans filing new claims for unemployment benefits last week increased to the highest level since early September, but the underlying trend continued to point to a strengthening labor market.

Initial claims for state unemployment benefits rose by 19,000 to a seasonally adjusted 316,000 for the week ended Jan. 10, the Labor Department said on Thursday.

Economists polled by Reuters had forecast claims falling to 291,000 last week. The prior week's data was revised to show 3,000 more claims received than previously reported.

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The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose by only 6,750 to 298,000 last week.

It has remained below 300,000, which is associated with a firming labor market, for 18 weeks. Last week's unexpected increase in claims likely does not indicate a material shift in the jobs picture.

Employment gains have exceeded 200,000 in each of the last 11 months, the longest stretch since 1994.

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Nearly 3 million new jobs were created last year, the strongest annual increase since 1999.

The strengthening labor market suggests the Federal Reserve will raise interest rates this year, having kept its short-term lending rate near zero since December 2008. But wages, which have yet to catch up to faster growth, will likely determine the timing of the first rate hike in nearly a decade.

The claims report showed the number of people still receiving benefits after an initial week of aid fell by 51,000 to 2.42 million in the week ended Jan. 3.