By Jonathan House
WASHINGTON--New applications for unemployment benefits rose last week but remained near eight-year lows.
Initial claims for unemployment benefits increased by 21,000 to a seasonally adjusted 311,000 in the week ended Aug. 9, the Labor Department said Thursday. That was more than the 295,000 new claims forecast by economists surveyed by The Wall Street Journal and the highest level since June. Claims for the previous week were revised up slightly to 290,000.
Applications for unemployment benefits, a proxy for layoffs, have been trending lower this year. The four-week moving average of claims, which smooths out weekly volatility, increased by 2,000 to 295,750, but that was still well below the average level of claims last year. They are now hovering around levels last seen in 2006, at the height of the previous expansion.
"Despite this morning's rise in claims, the underlying downward trend remains firmly in place," said Lindsey Piegza, chief economist at Sterne Agee. "Businesses continue to reduce the number of layoffs."
Jobless claims had fallen by nearly 30,000 in the prior two months, a period during which the shifting timing of auto plant shutdowns and summer vacations can make data difficult to seasonally adjust. Several economists noted that claims data tend to be volatile this time of year.
"Today's increase is likely a bounce-back from unusually low readings in the last month, which may have occurred due to seasonal adjustment issues," RBS Securities economist Omair Sharif said.
Thursday's report showed that the number of people continuing to draw unemployment benefits rose by 25,000 to a seasonally adjusted 2,544,000 for the week ended Aug. 2. Those figures are reported with a one-week lag.
Other labor-market gauges have also been improving. July marked the first time since 1997 that employers have added 200,000 or more jobs for six consecutive months.
The nation's unemployment rate has fallen rapidly over the last year, though at 6.2% it remains at a historically high level for this point in a recovery.
Still, diminishing unemployment has fueled hope that anemic wage growth could finally start gaining some momentum. More people working and earning more money could provide a boost to consumer spending, which accounts for over two-thirds of U.S. economic output.
"My own expectation is that as the labor market begins to tighten, we will see wage growth pick up," Federal Reserve Chairwoman Janet Yellen said in June.
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(END) Dow Jones Newswires
August 14, 2014 12:06 ET (16:06 GMT)
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