US applications for unemployment benefits jumped last week

As per the estimation by 30 economists surveyed by Bloomberg, the unemployment rate could reach 270, 000, but the latest analysis showed more than the projected value. The U.S. Labor Department says 20,000 more Americans submitted initial filings for unemployment benefits last week.

In addition, the 4-week moving average edged up by 4,500 filings to 277,000, from the previous week’s unrevised average of 272,500. Economist agree with the Labor Department, and it is not atypical for jobless claims to rise during the last week of December.

Continuing claims for unemployment insurance increased by 3,000 to 2,198,000 during the week ending December 19. “When the dust settles, we’ll see claims drop back down”. Before adjusting for seasonal variations, the increase in claims last week was about typical for this time of year, the agency spokesman said. Part of the reason is the strong job market improvement.

Next Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report for December.

As long as unemployment stays at or close to 5.0%, the Federal Reserve and Chair Janet Yellen likely will continue to be poised to gradually raise interest rates in 2016. These data are reported with a one-week lag.

First-time jobless claims have held below the 300,000-level for 42 consecutive weeks, which is usually associated with a firming labor market.

Many layoffs may also reflect company- or industry-specific causes, such as cost-cutting or business restructuring, rather than underlying labour market trends.