Weekly applications for US jobless aid rise; Producer prices advance moderately

By Lucia Mutikani

WASHINGTON, Jan 13 (Reuters) – The number of Americans filing new claims for jobless benefits unexpectedly rose in the first week of January amid raging COVID-19 infections, but remained at a level consistent with market conditions. rapidly adjusting labor market.

Other data released on Thursday suggested the worst of high inflation was probably behind us. Producer prices posted their smallest increase in 13 months in December, as the cost of goods fell. The drop in goods prices was the first since April 2020.

«These remain contained readings on jobless claims and do not change our view that job creation continued at a solid pace in January despite the omicron spread,» said Conrad DeQuadros, senior economic adviser at Brean Capital in New York.

Initial claims for state jobless benefits rose by 23,000 to a seasonally adjusted level of 230,000 for the week to Jan. 8, the Labor Department said. Economists polled by Reuters estimated 200,000 applications.

A spike in coronavirus cases, fueled by the omicron variant, has disrupted activity from airlines to schools as workers call in sick. Unadjusted claims increased by 103,693 to 419,446 last week.

However, claims remain below their pre-pandemic level, a sign of strengthening labor market conditions. They are down from an all-time high of 6.149 million in early April 2020. Employers are holding on to their workers, with 10.6 million job openings at the end of November.

The report showed the number of people receiving benefits after an initial week of aid fell by 194,000 to 1.559 million in the week ending Jan. 1. This is the lowest level for so-called continuing claims since June 1973.

The government reported last Friday that the jobless rate fell to a 22-month low of 3.9% in December, an indication that the labor market is at or near peak employment. The workforce is about 2.2 million fewer people than it was before the pandemic.

In a separate report on Thursday, the Labor Department said the Producer Price Index (PPI) for final demand rose 0.2% last month. That was the smallest gain since November 2020 and followed a 1.0% jump in November.

The prices of wholesale services rose 0.5%, explaining the increase in the PPI. That followed a 0.9% rise in November. Meanwhile, the prices of goods fell 0.4% after advancing 1.1% in the previous month. They were held back by declines in wholesale food and energy prices. Excluding food and energy, goods prices gained 0.5% after rising 0.8% in November.

In the 12 months to December, the PPI soared 9.7% after accelerating 9.8% in November. Economists polled by Reuters had forecast the PPI to rise 0.4% month-on-month and 9.8% year-on-year.

Excluding the volatile components of food, energy and commercial services, producer prices advanced 0.4% in December. The so-called core PPI rose 0.8% in November. In the 12 months to December, the core PPI gained 6.9%, matching the increase in November.

(Reporting by Lucia Mutikani. Edited in Spanish by Manuel Farías)