US initial jobless claims rise, steers possibility of a Dec interest rate hike

Initial jobless claims in the United States rose for the week ended Aug 27, albeit slower than what markets had initially expected. However, the rise steered possibilities of an interest rate hike in December this year.

Jobless claims rose by 2,000 to 263,000 in the week ended Aug 27, data released by the Labor Department showed Thursday. The median forecast in a Bloomberg survey called for 265,000. The four-week average dropped to a three-week low.

Another report from the Labor Department on Thursday showed output per hour of work declined 0.6 percent during the second quarter, a downward revision from the previously reported 0.5 percent decrease. Labor costs increased a revised 4.3 percent.

Further, filings have been below 300,000 for 78 straight weeks, the longest stretch since 1970 and a level that is typically consistent with an improving job market. The number of people continuing to receive jobless benefits rose by 14,000 to 2.16 million in the week ended Aug 20. The unemployment rate among people eligible for benefits held at 1.6 percent.

Meanwhile, a report from the Labor Department is expected on Friday which is projected to an increase in payrolls by 180,000 during August, following a 255,000 jump the previous month. The jobless rate is forecasted to fall to 4.8 percent from 4.9 percent.