Rise in unemployment claims doesn’t worry analysts
Striking workers at Verizon Communications pushed up new U.S. jobless claims last week, but there was little evidence that the recent stock market turmoil had scared businesses enough for them to cut workers, Reuters reported.
Initial claims for state unemployment insurance rose by 5,000 to 417,000, according to figures released by the U.S. Department of Labor. The level suggests the job market is still struggling to gain momentum, but falls short of a recession signal.
Striking Verizon workers filed 8,500 claims for jobless benefits last week, after submitting 12,500 applications the previous week, which covered the survey period. Striking workers are not eligible for benefits and their applications will most likely be rejected.
Despite the rise in claims, analysts were encouraged by the numbers.
“The encouraging news is that despite all the negative news we have had in August, the pace of layoffs has held steady,” said Omair Sharif, economist at RBS, in an interview with Reuters.
Federal Reserve Chairman Ben Bernanke will deliver the keynote address to a conference of central bankers from around the globe tomorrow, which will be monitored for any sign that a further easing of U.S. monetary policy is on the way.
Bernanke used the same speech last year to lay the groundwork for a $600 billion bond buying program that the U.S. central bank launched in November. He’s not expected to announce additional bond buying, but could hint at more gradual policy measures.