The number of initial claims for unemployment insurance in the week ending 15 August was at 277,000, an increase of 4,000 on the level of the previous week which was revised down by 1,000 to 273,000.
This is the highest initial jobless claims number recorded since early July, but significantly stays well below 300,000 for the 24th week in succession, the longest sequential period in over 15 years. The steady growth in the economy has resulted in the addition of an average of 211,000 new jobs monthly since the start of 2015. This number means that the U.S. is on track to see an increase of more than 2 million new jobs created for the full year.
The four week moving average, which is an average of the last four jobless claims numbers and tends to smooth out the weekly volatility, increased by 5,500 to 271,500, according to the Labor Department statistics in the Unemployment Insurance Weekly Claims Report released on Thursday. The average has remained below 300,000 since early March.
The insured unemployment rate remained at 1.7% for the week ending 8 August to a number of 2.254 million, a decrease of 24,000 from the previous week. The four week moving average was 2.2.65 million showing an increase of 9,500 from the number a week earlier.
The Federal Reserve, which said it is looking for “some improvement” in the employment numbers, should not be overly dismayed by the small increase in jobless claims as long as the number remains below 300,000, which it has been doing consistently.
The number of new jobs created has been steadily increasing and more people working means higher disposable income followed by higher consumer spending which reflects in a higher GDP, one of the numbers that the Fed uses as a gauge of economic growth.
Higher consumer spending could also be a factor in pushing inflation upwards, closer to the 2% ideal Federal Reserve officials are looking for as an important signal as to the timing of an increase in the interest rate.