The Labor Department said weekly jobless claims rose less than expected for the week ended April, bring the the four-week moving average to its lowest level since 2000. But considering last week the government changed its method for calculating the closely-watched survey, it is far from clear whether the data suggest the slowdown in job growth in March was a fluke.
First-time claims for state unemployment benefits rose by 14,000 to a seasonally adjusted 281,000 last week, but without the method change it is likely the number would not have remained below 300,000, a threshold that is associated with a strengthening labor market.
Economists polled by Reuters had forecast claims rising to 285,000 last week.
Job growth slowed sharply in March, with Labor’s own Bureau of Labor Statistics jobs report showing nonfarm payrolls increasing by just 126,000. The end to a 12-month stretch of employment gains above 200,000 was far from surprising, as the ADP National Employment Report and multiple sector surveys telegraphed the slowdown.
Last week’s abysmal employment numbers were also accompanied by weak consumer and business spending data, as well as industrial production and housing starts data, all of which culminated into a picture of the economy growing at a less-than 1 percent annual rate in the first quarter.
A Labor Department analyst said there was nothing unusual in the state-level data, but the department refused to comment on the impact the survey’s changes may have had on the number. However, it is true that weekly jobless claims tend to be volatile around Easter and holidays, in general.
The four-week moving average of claims — which is widely considered a better measure of labor market trends as it irons out week-to-week volatility — fell 3,000 to 282,250 last week. It is the lowest level since June 2000, but due to the aforementioned method changes prior weeks were revised down far more than economists anticipated.
The Federal Reserve is watching the jobs market as it decides when to raise interest rates this year, but FOMC minutes released Wednesday revealed the policy-making committee wants to keep flexible.
The claims report also showed the number of people still receiving benefits after an initial week of aid fell 23,000 to 2.30 million in the week ended March 28. Though that was the lowest level since December 2000, the number of ineligible long-term unemployed has simply helped to shrink the pool. Further, historical highs of otherwise able-bodied Americans on Social Security Disability Insurance offers another element to the economic story.