The number of people filing initial claims for unemployment insurance for the week ended 29 August grew to 282,000, an increase of 12,000 over the revised number for the previous week. This was 7,000 higher than the consensus forecast of 275,000 new claims.
Importantly, the number of new claims remains below the important 300,000 level where it has been for the last six months, the longest period the number has remained below that figure since the year 2000. The low level of new jobless claims suggests that there is a low rate of layoffs in the economy.
Gus Faucher, senior economist at PNC Financial Services, said that, “Firms are laying off fewer workers, and those that do lose their jobs are finding new work quickly.”
Meanwhile, the four week moving average, which smooths out the weekly bumps and is viewed as a more accurate and reliable indicator than the weekly figure, increased by 3,250 to 275,000.
Also, the other important statistic in the Department of Labor news release is that the insured unemployment rate for the week ending 22 August is unchanged at 1.7%, while the actual number of unemployed people receiving benefits dropped by 9,000 to 2,257,000. The four week moving average was 2,264,250, a decrease of 250 on the previous week.
The nonfarm payroll data, which is due out on Friday, is expected to show that 213,000 new jobs were created in August, according to consensus estimates. The average number of new jobs created monthly during 2015 stands at 215,000, which means the U.S. economy is on target to create more than 2 million employment opportunities for the fifth year in succession.
In addition, employment openings are at a record level while some industries such as construction are reporting an actual labor shortage. The unemployment rate, currently at 5.3%, is at a post-recession low after peaking at 10% in 2009. The consensus forecast is for the unemployment rate to drop to 5.2% when the data is released on Friday.