Jobless claims jump to highest level in nine months

By Greg Robb

Claims rise 22,000 to 231,000, well above expectations of 214,000

The numbers: Initial jobless-benefit claims rose by 22,000 to 231,000 in the week ending May 4, the U.S. Labor Department said Thursday. That's the highest level since last August.

Economists polled by the Wall Street Journal had estimated that new claims would rise to 214,000.

Last week, claims rose a revised 1,000 to 209,000, compared with the initial estimate of an unchanged reading at 208,000.

Key details: The number of people already collecting jobless benefits in the week ending April 27 rose by 17,000 to 1.79 million.

On an unadjusted basis, claims rose 19,690 to 209,324 in the week ending May 4.

There was a big surge in claims in New York and California.

Big picture: The rise in claims fits with other data showing that the labor market is softening, but economists will want to see more data before jumping to conclusions. Claims have rarely been much lower during the 57-year history of the series than they have in recent months, noted Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Federal Reserve Chairman Jerome Powell said last week that the softening of the labor market was evidence that the central bank's policy rate was high enough to push down demand and help cool inflation.

Looking ahead: "We do not think that this is necessarily a sign of rapidly deteriorating conditions in the labor market. Claims were bound to break out at some point," Tom Simons, U.S. economist at Jefferies, said in an email.

"We will need to see confirmation of more weakness in next week's data before we start to reassess our views on the market going forward, as we are inclined to look at this week's data as a one-off," he added.

Market reaction: Stocks DJIA SPX were set to open lower on Thursday. The yield on the 10-year Treasury note BX:TMUBMUSD10Yrose slightly to 4.516%.

-Greg Robb

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05-09-24 0928ET

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