WASHINGTON (AP) â€” A larger-than-expected number of Americans filed new claims for unemployment benefits last week, pushing applications to their highest level since the beginning of the year.
Many economists believe the increase mostly reflected a seasonal fluke and said that, among other things, they would need to see a sustained rise in claims to conclude that the supercharged economy is really slowing.
For the week ending June 3, new claims for jobless benefits rose by 20,000 to 309,000, the highest level since Jan. 8, the Labor Department reported Thursday.
Government officials said difficulties adjusting data to account for the Memorial Day holiday likely accounted for some of last week's increase. Private economists agreed, saying claims data tend to be volatile around the holidays.
On Wall Street, blue chip stocks fell sharply after Procter & Gamble surprised investors with an earnings warning and a management shake-up. The Dow Jones industrial average closed down 144.14 points at 10,668.72.
``It's too early to say there's a cooling in the labor market,'' said Srinivas Thiruvadanthai, an economist with the Levy Institute Forecasting Center. ``You'd have to see a much bigger move.''
Ken Mayland, an economist with ClearView Economics, said the Labor Department's more stable four-week moving average of claims would need to climb to and stay at a range of around 325,000 to 350,000 to be viewed as a slowing in both the labor market and the larger economy.
Last week, the four-week moving average of claims, which smoothes out week-to-week volatility, ticked up to 290,250, the highest level since May 20.
Even with the increase, the four-week moving average has been running below 300,000 since late October.
Economists consider claims below 300,000 an indication of a tight labor market, meaning employers are having trouble finding qualified workers to fill job openings.
While that is good for workers, economists find it worrisome. They fear employers will recruit workers with big increases in wages and benefits, added costs companies could pass along to consumers in the form of higher prices.
The Federal Reserve has boosted short-term interest rates six times since last June, including a half-point increase last month, to slow the economy and keep inflation from becoming a problem.
Yet, jobless claims over that period have mostly been hovering at levels highlighting the difficulty employers are having in trying to find people to hire in a booming economy.
Mayland, noting that the four-week moving average of claims has inched up from the levels in March and April, said that could ``hint that there is a bit of ease developing in an otherwise skintight labor market environment.''
Last week, the government reported that the nation's unemployment rate climbed to 4.1 percent in May and employers cut jobs. That, along with other recent economic data, may indicate that the Fed's rate increases are kicking in and beginning to slow the economy a bit.
Against this backdrop, economists are now offering mixed opinions on whether or not the Fed will boost rates again later this month.
On the Net:
The jobless claims report: http://www.dol.gov/dol/opa/public/media/press/eta/ui/eta2000167.htm