US jobless claims rise by 3,000 amid tightening labour market

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The number of Americans filing for unemployment benefits unexpectedly rose last week, but the underlying trend remained consistent with a tightening labour market. Initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 244,000 for the week ended Aug. 5, the Labor Department said on Thursday.

Data for the prior week were revised to show 1,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims would be unchanged at 2,40,000 in the latest week. With the labour market near full employment, there is probably limited room for claims to continue declining.

Claims have now been below 300,000, a threshold associated with a healthy labour market, for 127 straight weeks. Thatis the longest such stretch since 1970, when the labour market was smaller. The unemployment rate is 4.3 percent.

Labor market tightness could encourage the Federal Reserve to announce a plan to start unwinding its $4.2 trillion portfolios of Treasury bonds and mortgage-backed securities at its policy meeting next month.

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