- John Ryding, chief economist at RDQ Economics
The number of Americans applying for unemployment benefits unexpectedly increased to the highest level in five months last week. Yet, the sharp jump did not mean deterioration in the labour market, as the underlying trend remained consistent with tightening conditions. Initial claims for jobless benefits surged 13,000 to a seasonally adjusted 282,000 for the week ended December 5, the highest level since early July, according to the Labor Department. The four-week moving average, considered a better gauge of labour market trends as it irons out week-to-week volatility, climbed by 1,500 to 270,750 last week. Claims have been below the 300,000 threshold, which is associated with strengthening labour market, for 40 consecutive months. This is the longest such streak since the early 1970s. As the labour market approaches full employment, little room remains for further decreases.
Meanwhile, a separate report showed the US imported less deflation than expected in November, as import prices declined only half as much as analysts estimated. Prices of products shipped into the country dropped 0.4% in the reported month, compared with the 0.8% decrease predicted by analysts. In annual terms, import costs were 9.4% lower last month than a year ago.
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