Unemployment claims increase to 198,000, higher than expected
Initial claims for unemployment insurance ticked higher last week, but remained generally low in a tight labor market.
Jobless claims for the week ending March 25 totaled 198,000, up 7,000 from the previous period and slightly higher than the estimate of 195,000, the Labor Department reported Thursday.
Although the figure was slightly higher than expected, the total indicates that companies are slow to lay off workers despite expectations that unemployment will rise throughout the year.
Continuing claims, which run a week behind, increased by 4,000 to 1.689 million. That was below the FactSet estimate for 1.6935 million.
The four-week moving average of weekly claims, which smooths out volatility in the numbers, rose to 198,250 but has been below 200,000 since mid-January.
The relatively benign claims figures come despite aggressive efforts by the Federal Reserve to curb inflation. To a large extent, the central bank targets a labor market characterized by a sharp imbalance between supply and demand, where there are almost two vacant jobs for every available employee.
According to estimates last week, central bankers expect unemployment to rise to 4.5% this year, from the current level of 3.6%. Doing so would require the loss of more than 540,000 jobs, according to an Atlanta Fed calculator.
A separate economic report on Thursday showed that growth was somewhat less strong towards 2022 than previously thought.
The Commerce Department’s final reading of gross domestic product showed the economy grew at a 2.6% annual rate in the fourth quarter, slightly below the previous estimate of 2.7%. This change was primarily due to downward adjustments in consumer spending and exports, the department said.
Growth likely accelerated in the first three months of 2023, according to the Atlanta Fed’s GDPNow tracker. This gauge shows that GDP rises by 3.2 per cent.
Markets reacted little to the fresh flurry of data, with futures pointing to a higher opening on Wall Street.
