WASHINGTON, July 13: New applications for US unemployment benefits jumped to 19,000 last week on the back of the traditional summer shutdown at automobile plants, according to government data released on Thursday.
Initial claims for state jobless insurance benefits rose to 332,000 on a seasonally adjusted basis in the week ended July 8, from 313,000 the prior week, the Labour Department said.
Analysts were expecting new claims to rise, but only to 318,000.
The Treasury debt market shrugged off the larger-than-expected rise in new claims as traders focused on the news of Israel's air strikes in Lebanon, which fanned fears of crude oil supply disruption from the Middle East. US stocks fell on record oil prices, and the dollar slipped against major currencies.
A Labour Department analyst said that before seasonal adjustments, the increase in claims was mostly caused by the annual summer shutdown in the automobile industry.
Automobile plants traditionally shut down for some time during July for maintenance. This year General Motors closed its plants for one week, Ford Motor Co.'s were closed for at least a week and Nissan Motor Co.'s for a few days.
The analyst said the rise also included 4,000 unadjusted new claims caused by a partial shutdown of the New Jersey state government over a missed deadline for its budget. The shutdown, which furloughed 45,000 state workers earlier this month, has since been resolved.
Analysts cautioned about reading too much into the figures, as the holiday-shortened workweek in observance of Independence Day, the New Jersey government shutdown and the annual auto plant summer shutdown could have distorted the data.
“One week does not make a trend and some disturbances certainly applied weakness to the overall labour market conditions, but even when you take (that) into account ... it still suggests some easing” of labour-market tightness, said Anthony Chan, managing director and chief economist for JP Morgan Private Client Services.—Reuters
