"Businesses have been running with very tight workforce levels,"
- Russell Price, a senior economist at Ameriprise Financial Inc.
The number of Americans filing for the unemployment benefits surprisingly rose more than analysts expected, reaching a two-month high, even despite usual swings in jobless application in July. According to the Labor Department, the number of initial jobless claims jumped by 16,000 up to 360,000 in the week ended July 6, up from a revised 344,000 a week earlier. Analysts called for a drop to 340,000. Claims are usually difficult to adjust this month, due to vehicle plant shutdowns and the Independence Day holiday in the beginning of month. The less volatile four-week moving average also climbed to 351,750, up from 345,750. At the same time, the number of people continuing to receive the unemployment benefits rose by 24,000 to 2.98 million during June's last week.
It was though that the fact that companies increased hiring in June, wages edged higher, while the overall jobless rate held close to a four-year low, as the economy weathered the effect of federal budget cuts and tax hikes, are likely to keep the Federal Reserve on track for tapering the quantitative easing programme in September. However, a fiscal policy adopted by the U.S. Congress that automatically will reduce the federal budget across most departments and agencies, also known as a "sequester", is expected to have a big impact on the U.S. long-term unemployment, as jobless people will have their federal jobless benefits shrink by almost 15%.
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