New U.S. claims for jobless benefits unexpectedly rose to their highest level in four months last week as a post-hurricane season uptick persisted, government data showed Wednesday.
Levels remained low by historical standards, however, and analysts said the numbers did not yet show a clear upward trend.
The report, which was conducted during the survey week for the Labor Department’s much more closely watched monthly employment report, also suggested strong job creation was likely to continue in November.
This was thus the first back-to-back increase in initial jobless claims in 16 weeks. It lifted the 4-wk average by 2k to 218.5k, highest in 18 weeks. Claims reports at this time of year are plagued by volatility, but a reversal from 50-year lows may be upon us. (3 of 3) pic.twitter.com/Muc2Kk8ZpE
— Jeoff Hall (@JeoffHall) November 21, 2018
With unemployment at its lowest level since 1969, employers have complained over the last year of a worsening labor shortage and have hesitated to dismiss workers who are increasingly difficult to replace — a situation which has begun to drive up wages but also to eat into profits.
For the week ended November 17, claims rose by 3,000 to a seasonally adjusted 224,000, the highest level since May 19. Analysts had expected a lower reading of only 215,000.
A less volatile four-week moving average also rose by 2,000 claims to 218,500.
Back-to-back hurricanes in September and October slammed into the U.S. Atlantic and Gulf coasts, disrupting business for millions and likely driving up claims for unemployment insurance.
In the following weeks, the numbers have yet to revert to trend, however.
Jim O’Sullivan of High Frequency Economics said the uptick was still noticeable even when numbers from hurricane-hit states were excluded.
“The rise is too small to be significant yet, and the level remains historically low, but a continued rise would be concerning,” he wrote in a client note.