U.S. jobless claims decline from five-month high

help wanted sign in Colorado

WASHINGTON, (Reuters) – The number of Americans filing for unemployment benefits fell from a five-month high last week, pointing to labor strength that underscores the economy’s sustained momentum.

Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 258,000 for the week ended Dec. 3, the Labor Department said on Thursday. Claims for the prior week were unrevised.

It was the 92nd straight week that claims were below 300,000, a threshold which is associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was much smaller.

Economists polled by Reuters had forecast first-time applications for jobless benefits falling to 258,000 in the latest week. Claims hit a 43-year low in mid-November.

Economists had dismissed the recent back-to-back increases in filings, which had pushed claims to a five-month high, as an aberration. Claims tend to be volatile around this time of the year because of different timings of the Thanksgiving holiday.

A Labor Department analyst said there were no special factors influencing last week’s data and that no states had been estimated. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 1,000 to 252,500 last week.

The labor market is near full employment, with the government reporting last week that the unemployment rate fell to a nine-year low of 4.6 percent in November amid solid increases in nonfarm payrolls.

A tight labor market together with signs of a strengthening economy and steadily rising inflation will likely push the

Federal Reserve to hike interest rates at its Dec. 13-14 policy meeting. The U.S. central bank raised its benchmark overnight interest rate last December for the first time in nearly a decade.

Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid fell 79,000 to 2.01 million in the week ended Nov. 26. That followed two straight weekly increases.

The four-week average of the so-called continuing claims slipped 9,500 to 2.03 million.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Exclusive: Top Obama aide to take call for South China Sea calm to Beijing

Chinese vessel in South China

By Matt Spetalnick and David Brunnstrom

WASHINGTON (Reuters) – U.S. National Security Adviser Susan Rice will urge Beijing next week to avoid escalation in the South China Sea when she makes the highest-level U.S. visit to China since an international court rejected its sweeping claims to the strategic waterway.

Even as Washington has sought to keep a lid on the situation, Rice – in an interview with Reuters – vowed that the U.S. military would continue to “sail and fly and operate” in the South China Sea, despite a Chinese warning that such patrols could end “in disaster.”

With less than six months remaining of President Barack Obama’s tenure, Rice’s broader mission in her July 24-27 trip is aimed at keeping overall ties between the world’s two largest economies, which she called “the most consequential relationship we have,” on track at a time of heightened tensions. “I’ll be there to advance our cooperation,” she said.

But the trip, due to be formally announced later on Friday, follows a July 12 ruling by the Permanent Court of Arbitration in The Hague that China has no historic title over the waters of the South China Sea. Beijing has angrily rejected the verdict and pledged to pursue claims that conflict with those of several smaller neighbors.

“I’ve been in communication with our Chinese counterparts over the last couple of weeks … We understand each other’s perspectives clearly,” Rice said when asked what message she would deliver to the Chinese. “We’ll urge restraint on all sides.”

Her trip, to include Beijing and Shanghai, will coincide with visits by U.S. Secretary of State John Kerry to Laos and the Philippines where he is expected to try to reassure Southeast Asian partners of Washington’s commitment.

The United States is also using quiet diplomacy to persuade claimants like the Philippines, Indonesia and Vietnam not to move aggressively to capitalize on The Hague ruling, U.S. officials have said.


How Washington handles the aftermath of the ruling is widely seen as a test of U.S. credibility in a region where it has been the dominant security presence since World War Two but is now struggling to contain an increasingly assertive China.

China has responded to the ruling with sharp rhetoric. But a senior official said, “So far there has not been precipitous action” and Washington was hoping confrontation could be avoided.

“We are not looking to do things that are escalatory,” another senior U.S. official said. “And at the same time we don’t expect that they (the Chinese) would deem it wise to do things that are escalatory.”

Despite that view, two Chinese civilian aircraft conducted test landings at two new military-length airstrips on reefs controlled by China in the Spratly Islands shortly after the arbitration ruling.

And signaling Beijing’s plans to further stake its claim to contested waters, a Chinese state-run newspaper said that up to eight Chinese ships will offer cruises to the South China Sea over the next five years.

China has blamed the United States for stirring up trouble in the South China Sea, a strategic waterway through which more than $5 trillion of trade moves annually.

Citing international rules, the United States has conducted freedom-of-navigation patrols close to Chinese-held islands where China has been bolstering its military presence.

Rice is expected to meet Chinese President Xi Jinping during her visit and her agenda will include North Korea, economic issues and human rights. She will also lay the groundwork for Obama’s talks with Xi at a G20 summit in China in September, U.S. officials said.

But with the South China Sea issue looming large, Rice, who has led U.S. policymaking on China, said the United States and China have “careful work to do to manage our differences.”

She also said the administration would not allow crises in other parts of the world, from Syria to Turkey to Ukraine, to distract from Obama’s signature policy of “rebalancing” toward Asia. “We don’t have the luxury as the world’s leading power to devote our attention to one region and ignore another,” she said.

(Reporting by Matt Spetalnick and David Brunnstrom; Additional reporting by Lesley Wroughton; Editing by Cynthia Osterman)