This Week’s Jobless Claims Data Negates Scares Of Job Growth

The jobless claims fell to a 15-year low in the past month, suggesting that the slowdown suggested by the March payroll data might have been a fluke
This Week’s Jobless Claims Data Negates Scares Of Job Growth

Over the past week (ended April 4), the number of Americans applying for unemployment benefits jumped 14,000 to a seasonally adjusted 281,000. Analysts polled by Bloomberg estimated an even steeper rise to the jobless claims though, expecting the figure to come in at 283,000. The Labor Department report, issued today, confirmed that for the fifth week running, the jobless claims in America kept below the 300,000 mark.

The four-week moving average for jobless applications saw a decline of 3,000 from the last week’s figure, to 282,500 – the lowest level since 2000. The claims, being at a fifteen-year low, signal to the strength in the US labor market, despite the surprisingly low job creation in March. The economy added only 126,000 jobs last month, compared to a 12-month moving average of 269,000. That said, the recent jobless data erases the concerns brought about by March’s sluggish non-farm job growth.

Chief Economist at RDQ Economics, John Ryding, told Reuters: “The claims data provide no confirmation of the March employment slowdown.”

The sharp decline in job creation last month is mostly being linked to the sectors sensitive to weather. The first quarter has seen considerable downside in the economic activity though, and the GDP growth figures might well come in below 1% for the period. Apart from just the extreme cold, the stronger dollar has hit the manufacturing sector, affecting both jobs and production.

The Labor Department’s report also shows that the number of Americans receiving unemployment benefits slipped 23,000 to 2.3 million in the week ended March 28 – the lowest figure since December 2000. RBS Economist, Guy Berger said: “If claims remain this low, and we think they might even head lower in the coming weeks, it will be hard to claim there is persistent weakness in the labor market.”

The Federal Reserve will be closely monitoring the labor market condition as it is faced with the important decision of raising interest rates. The prior projections suggested a rate hike in mid-2015. However, with the recent slowdown in the economy, the Fed will maintain its cautious approach and wait a little longer before adopting the contractionary policy move.

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