The number of Americans filing for unemployment benefits climbed to the highest level in five weeks, representing a pause in the recent progress that left claims at their lowest level since 1973.
Applications increased by 16,000 to 276,000 in the week ended Oct. 31, a Labor Department report showed Thursday. It marked the biggest advance since the end of February, while the level exceeded the Bloomberg survey median estimate of 262,000. The four-week average of claims climbed from the lowest in four decades.
Employers intent on ensuring skilled workers remain on their payrolls have been holding the line on dismissals, making adjustments to hiring plans instead in response to the slowdown in overseas economies. A report Friday is projected to show job growth that’s a step down from the average so far this year.
“We’re still at very healthy levels,” said Thomas Costerg, senior U.S. economist at Standard Chartered Bank in New York, whose forecast for 275,000 claims was among the closest in the Bloomberg survey. “Jobless claims suggest the labor market is quite close to full employment.”
Estimates from 48 economists in the Bloomberg survey ranged from 255,000 to 275,000. The prior week’s claims were unrevised at 260,000.
No states estimated data last week and there was nothing unusual in the data, the Labor Department said.
Another report, released at the same time, showed productivity unexpectedly climbed at a 1.6 percent annualized rate in the third quarter, while labor costs climbed less than forecast.
The four-week average of jobless claims, a less-volatile measure than the weekly figure, rose to 262,750 from 259,250 the week before, which was the lowest since December 1973.
The number of people continuing to receive jobless benefits increased by 17,000 to 2.16 million in the week ended Oct. 24.
In that same period, the unemployment rate among people eligible for benefits held at 1.6 percent the prior week, where it’s been since mid-September, the report showed.
Federal Reserve policy makers, who have a dual mandate of full employment and stable prices, are weighing data including jobless claims as they gauge whether the economy is strong enough to withstand the first interest-rate increase since 2006.
In testimony to U.S. lawmakers on Wednesday, Fed Chair Janet Yellen said an improving economy has set the stage for a December rate hike, should data continue to indicate that inflation will accelerate over time.
“I see under-utilization of labor resources as having diminished significantly since earlier in the year, although recently we’ve seen some slowdown in the pace of job gains,” Yellen said. “If we were to move, say in December, it would be based on an expectation, which I believe is justified, that -- with an improving labor market and transitory factors fading -- that inflation will move up to 2 percent.”
Many layoffs now reflect company-specific causes as businesses seek to change course or cut costs, rather than severe economic slowdown. Kraft Heinz Co. announced plans on Wednesday to eliminate about 2,600 jobs and close seven factories as the third-largest food and beverage maker in North America faces declining sales at its two major businesses.
The move is in addition to the 2,500 job cuts Kraft Heinz announced in August and will occur in stages over the next 12 to 24 months. The company has said it will cut $1.5 billion in annual expenses by the end of 2017.