On Thursday, just before the release of the anticipated monthly employment report, the Labor Department indicated an unexpected rise in first-time claims for U.S. unemployment benefits for the week ending on March 30. The report states that the initial jobless claims ascended to 221,000, marking an increase of 9,000 from 212,000, the revised figure for the previous week.
Economists had projected a slight rise in jobless claims to 214,000, from the initial figure of 210,000 reported for the earlier week. With a larger than anticipated surge, jobless claims reached their peak since hitting a high of 225,000 in the week ending on January 27. According to the Labor Department, the less volatile four-week moving average also slightly rose to 214,250, rising by 2,750 from the prior week’s revised average of 211,500.
Furthermore, the report illustrated that continuing claims, which provide a reading on the number of individuals gaining continuous unemployment assistance, lowered by 19,000 to a total of 1.791 million for the week ending on March 23. The four-week moving average of continuing claims showed a minor decline to 1,799,750, which signifies a decrease of 750 from the revised average of 1,800,500 from the week before.
Nancy Vanden Houten, Lead US Economist at Oxford Economics, stated that "The claims data and other labor market indicators are consistent with a job market that is still quite healthy." She further added, "The Fed doesn't require a significant weakening in the labor market to begin cutting interest rates but does need to be confident the job market is balanced enough to support slower wage growth," Based primarily on recent inflation data, she suggested a delay in the timing of the first rate cut from May to June in their forecast.
The Labor Department is set to release its much-anticipated monthly employment report for March on Friday. Economists predict that employment surged by 200,000 jobs in March, following an increase of 275,000 jobs in February, while the unemployment rate is expected to remain steady at 3.9 percent.
