US jobless claims unexpectedly rise; Q2 GDP revised up a touch

The number of Americans filing for unemployment benefits unexpectedly rose last week amid a surge in claims in California, according to figures released by the Labor Department on Thursday.

US initial jobless claims pushed up by 11,000 from the previous week’s unrevised level to 362,000. Economists had been expecting a decline to 335,000.

The four-week moving average increased by 4,250 from the previous week’s unrevised level to 340,000. The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Meanwhile, continuing claims, which are a week behind the headline weekly number, rose by 131,000 to 2.84m.

Pantheon Macroeconomics said: "Don’t panic. The least likely explanation for the increase in claims in recent weeks is that the underlying trend in layoffs is rising, given that indicators of consumers’ discretionary spending are beginning to head back up, as Delta cases plunge.

"Instead, we think the issue is that the numbers are still elevated as a result of delayed claims triggered by Hurricane Ida, while the seasonal adjustments right now time - especially this week - are not helpful. The Ida effect should now fade from the numbers, but the seasonals are even more severe for the next couple weeks, so claims likely won’t return to their previous lows until mid-October. After that, the downward trend should resume as economic activity revs back up post-Delta."

Separate data from the Commerce Department showed that economic growth in the US accelerated in the second quarter as government pandemic relief money underpinned consumer spending.

Gross domestic product rose at an annualised pace of 6.7% in the April to June quarter, up from a previous estimate of 6.6% growth. That left the economy 0.9% higher than pre-pandemic levels.