US weekly jobless claims see unexpected jump, because of Verizon strike

A fair bit of the tightening observed in the US jobs market observed since the start of the year had apparently unwound, the latest weekly tally of unemployment benefit claims appeared to show.

Nonetheless, Barclays's Jesse Hurwitz pointed out how nearly the entire rise in claims could be put down to the 23,000 jump seen in New York state because of the strike by Verizon workers which started on 13 April.

As well, Thursday's reading on claims marked the 62nd consecutive week of initial claims below 300,000, the longest such streak since 1973.

Initial US jobless claims jumped by 20,000 over the week ending on 7 May to reach 274,000, according to the Department of Labor.

The previous week's reading of 274,000 initial claims was unrevised.

Economists at Barclays had been expecting a slight dip to 270,000.

The four-week moving average, which aims to remove distortions in the data arising from week-to-week, increased by 10,250 to 268,250.

The DoL said no special factors impacted the data.

Secondary unemployment claims, those which are not filed for the first time and referencing which ended on 30 April, rose by 37,000 to 2.161m.

"We expected an above-consensus number as claims continue to unwind their April plunge, which was very likely due to seasonal adjustment problems caused by the early Easter. This reading is higher than we expected but it probably marks the end of the rebound, and over the next few weeks claims should revert to their underlying trend, which we think remains in the low 270s," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.