U.S. weekly jobless claims drop more than expected; continuing claims
WASHINGTON — The number of Americans filing new claims for unemployment benefits fell more than expected last week, suggesting that the labour market remained fairly tight, 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, the Labor Department said on Thursday. Economists polled by Reuters had forecast 215,000 claims in the latest week.
Claims, however, tend to be volatile around this time of the year because of the Easter, Passover and public schools’ spring breaks, whose timing shifts every year.
The labour market remains resilient despite 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022 to tame inflation. Job growth accelerated in March, while the unemployment rate slipped to 3.8 per cent from 3.9 per cent in February. That is contributing to keeping inflation elevated, through higher prices for services.
Labour market strength and stubbornly high inflation have forced financial markets to push back their expectations for the first rate cut from the U.S. central bank to September from June. Minutes of the Fed’s March 19 and 20 meeting showed officials worried that progress on inflation might have stalled.
The central bank has kept its policy rate in the 5.25 to 5.50 per cent range since July.
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 claims report showed.