WASHINGTON -- The number of Americans filing new claims for unemployment benefits rose last week after a sharp decline the previous week.
The Labor Department reported today that 288,000 Americans filed new claims for jobless benefits for the week ending Oct. 30, up 8,000 from the previous week. That was the highest level since Oct. 16, when claims were at 292,000.
The four-week moving average for claims, which smoothes out week-to-week volatility, was down last week to 287,250. That was the lowest level since Sept. 18, when claims were at 286,000.
Last week's increase was in line with many analysts' expectations. They were forecasting claims would rise to 287,000.
For the week ending Oct. 23, 280,000 Americans filed jobless claims, a decrease of 12,000.
Economists consider jobless claims levels below 300,000 an indication of an extremely tight labor market.
That's good news for workers, but it is potentially troublesome to economists. They fear that employers will offer higher wages and benefits to attract qualified workers and those costs could drive up prices and spark inflation.
The Federal Reserve, in a survey Wednesday of business conditions across the nation, said that despite tight labor markets and rising wage pressures, "there are few signs of a general pickup in prices of final goods and services."
Fed policy-makers meet next on Nov. 16 to decide whether to raise interest rates for a third time this year. Although many economists said the probability of the Fed raising rates has declined from a few weeks ago when it seemed a sure thing, there is still a 50 percent chance the Fed will bump up rates again in November, they said.
Economists said the Fed's decision is likely to be heavily influenced by the results of October's employment report, which will be released by the government Friday.
The nation's unemployment rate is now at 4.2 percent, a 29-year low. Many economists believe it will stay at that rate, but some think it will tick down a notch to 4.1 percent.
In September's report, businesses actually cut their payroll jobs by 8,000, reflecting the impact of Hurricane Floyd, which raked the East Coast. But many economists expect a big rebound in October with businesses adding more than 300,000 jobs. Economists also expect moderate earnings growth in October.
A strong employment report on Friday could stoke fears that the Fed will raise interest rates again.
The Labor Department said today that for the week ending Oct. 23, 39 states and territories reported increases in new jobless claim applications while 14 reported decreases. California had the biggest increase, 7,514, which was attributed to layoffs in the construction industry.
Others states with big increases: Illinois, up 3,028; New York, up 1,470; South Carolina, up 1,422; and Texas, up 1,299.
The state with the biggest drop was Ohio, down 3,085. Officials gave no reason for the decline.
Other states with big decreases: North Carolina, down 2,365; Tennessee, down 1,794; and Kentucky, down 1,251.