(RTTNews) - After showing a notable decrease in the previous week, first-time claims for unemployment benefits rebounded by much more than expected in the week ended January 22nd, according to a report released by the Labor Department on Thursday. The Labor Department said initial jobless claims jumped by 51,000 to 454,000 from the previous week's revised figure of 403,000. Economists had expected jobless claims to edge up to 405,000 from the 404,000 originally reported for the previous week.
While claims rose by much more than anticipated, the Labor Department noted that the data was impacted by bad weather in several states as well as the Martin Luther King Day holiday.
Peter Boockvar, equity strategist at Miller Tabak, said, "Bottom line, initial claims were distorted and are thus worthless data today in terms of gauging the overall state of the labor market. Wait till next week."
The report showed that the less volatile four-week moving average rose to 428,750 from the previous week's revised average of 413,000.
Continuing claims, a reading on the number of people receiving ongoing unemployment help, also rose to 3.991 million in the week ended January 15th from the preceding week's revised level of 3.897 million.
Meanwhile, the report also showed that extended benefits increased by a net 98 thousand in the week ended January 8th.
Despite the disappointing weekly jobless claims data, Jennifer Lee, senior economist with BMO Capital Markets, said, "Hiring is picking up and it will continue to do so this year."
"Businesses will be taking advantage of the tax deduction allowed them by the new tax measures signed into law in December (writing off certain purchases of machinery and equipment) and that should spark hiring," she added.
Employment data is likely to be in focus next week, with the Labor Department due to release its report on the employment situation in the month of January on Friday.
by RTT Staff Writer
