The number of Americans filing new claims for unemployment benefits fell unexpectedly, though recent data still suggest the labor market and economic growth have stalled.
(Highlights: Weekly jobless claims fall by 20,000 to 268,000 for the week ended March 28, despite economists’ expectations of a gain to 285,000 amid a softening labor market.)
Initial claims for state unemployment benefits fell by 20,000 to a seasonally adjusted 268,000 for the week ended March 28, according to the Labor Department report released Thursday. Weekly jobless claims for the prior week were revised to show 6,000 more applications received than previously reported, explaining how and why the report took Wall Street by surprise when initially released.
Economists polled by Reuters had forecast claims rising to 285,000 last week, though the data could be revised next week to more closely reflect expectations.
Yet, despite the Labor Department analysts claiming there were no unusual factors in the state-level data, the results are the first since the department made revisions to the model it uses to adjust the claims data for to deal with so-called “seasonal fluctuations.”
Meanwhile, the four-week moving average of claims, which is considered a better measure of labor market trends as it irons out week-to-week volatility, fell 14,750 to 285,500 last week. Numbers above 300,000 claims, were it has been for several weeks, indicate souring labor market conditions.
The latest claims report has no bearing on March’s employment report as it falls outside the survey period.
Nonfarm payrolls are expected to increase by 245,000 last month, with the unemployment rate holding steady at a more than 6-1/2 year low of 5.5 percent, according to a Reuters survey of economists.
Although the anticipated increase would be below February’s 295,000 jobs, March would mark the 13th straight month of employment growth above 200,000 – the longest stretch since 1994.
However, the government’s monthly numbers do not comport with the overall economic picture, as the ADP National Employment Report released Wednesday showed that private payrolls gains in March were the smallest since January 2014. Further, low-paying service sector jobs dominated private sector job creation, while higher-paying construction and manufacturing took grave hits.
In fact, the Institute for Supply Management (ISM) gauge of manufacturing activity — also released Wednesday — barely reflected growth, and the employment index actually teetered on contraction.
Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid fell 88,000 to 2.33 million in the week ended March 21. That was the lowest reading since December 2000.