Data from the US Labour Department on Thursday showed first-time applications for unemployment benefits fell more than expected last week, pointing to a still fairly tight labour market, though it could be taking longer for some laid-off workers to land new jobs.
Initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 211,000 for the week ended April 6. Economists had forecast 215,000 claims in the latest week.
Claims tend to be volatile around this time of the year because of Easter, Passover and public schools’ spring breaks, whose timing shifts every year. Nonetheless, the data suggested the labour market remained healthy early in the second quarter. Job growth accelerated in March, while the unemployment rate slipped to 3.8 per cent from 3.9 per cent in February.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 28,000 to 1.817 million during the week ending March 30, the highest level since January, the claims report showed.
The advance seasonally adjusted insured unemployment rate was 1.2 per cent for the week ending March 30, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 30 was 1,817,000, an increase of 28,000 from the previous week’s revised level. The previous week’s level was revised down by 2,000 from 1,791,000 to 1,789,000. The 4-week moving average was 1,802,750, an increase of 3,500 from the previous week’s revised average. The previous week’s average was revised down by 500 from 1,799,750 to 1,799,250.
The four-week moving average was 214,250, a decrease of 250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 214,250 to 214,500.
“Even though hiring growth is slowing, net payroll growth remains strong thanks to the low level of layoffs in the economy, and there is no sign from the claims data that the story is changing,” said Michael Pearce, deputy chief U.S. economist at Oxford Economics in New York.
High inflation and persistent labour market strength have prompted financial markets and most economists to push back expectations for the first interest rate cut from the Federal Reserve to September from June.
Minutes of the US central bank’s recent meeting published on Wednesday also showed concerns among Fed officials that progress on lowering inflation might have stalled.
“Although the pace of disinflation has slowed, fears of a resurgence in inflation look overdone,” said Paul Ashworth, chief North America economist at Capital Economics in Toronto.