Jobless Claims Increase to Highest Level in Five Weeks
Applications for unemployment benefits increased to a five-week high, a sign that progress in the strongest part of the U.S. economy may be moderating.
Jobless claims rose by 17,000 to 274,000 in the week ended April 30, a Labor Department report showed May 5. The median forecast in a Bloomberg News survey was 260,000. The jump was the largest since January 2015.
Increases in new applications probably would be needed to mark a shift in sentiment among hiring managers about the economy’s prospects after the weakest quarter for growth in two years. Focus turns to payrolls data due May 6 from the Labor Department, and forecasts call for another steady employment gain in April.
“If they trend higher for a few weeks, then we start to worry, but we’ve been steadily lower,” said Gennadiy Goldberg, a U.S. strategist at TD Securities in New York, who projected an increase to 271,000. “The U.S. economy may not be growing at 3%, but we’re continuing to muddle along, and that’s still creating a demand for labor.”
Forecasts in the Bloomberg survey ranged from 250,000 to 275,000. Filings dropped to 248,000 in mid-April, the lowest since 1973.
While nothing unusual was in the data, claims last week were estimated for Washington, D.C., according to the Labor Department.
The four-week average of jobless claims, a less volatile measure than the weekly figure, rose to 258,000 from 256,000 in the prior week. Filings have been below 300,000 for 61 weeks — the longest stretch since 1973 and a level economists say is consistent with a healthy labor market.
The number of people continuing to receive jobless benefits fell by 8,000 to 2.12 million in the week ended April 23, the lowest level since November 2000. The unemployment rate among people eligible for benefits dropped to 1.5% from 1.6%. These data are reported with a one-week lag.
The Labor Department’s monthly employment report is projected to show employment remained sturdy in April. Economists project about 200,000 jobs were added last month after a 215,000 increase in March.
Federal Reserve officials meeting last week noted that “a range of recent indicators, including strong job gains, points to additional strengthening of the labor market,” even as they passed on raising the benchmark interest rate from its range of 0.25% to 0.5%. The central bankers next meet June 14-15.
