Weekly unemployment claims higher than expected

Demand for first-time unemployment insurance rose more than expected last week despite other signs of a cure in the labor market, the Labor Department said Thursday.

First-time claims for the week ended April 3 amounted to 744,000, well above expectations for 694,000 of economists surveyed by Dow Jones. The total represented an increase of 16,000 over the 728,000 revised up from the previous week. The four-week moving average rose to 723,750.

The news comes a week after a more aggressive sign of healing in the labor market, as non-farm payrolls in March rose by 916,000 while the unemployment rate fell to 6%.

This was the largest employment gain since August 2020, although unemployment remains well above the pre-pandemic low of 3.5%.

Ongoing claims provided good news on the labor front, with a total of 16,000 to 3.73 million. This is the lowest level for continued claims since March 21, 2020, just after the success of the Covid-19 pandemic and companies instituted wholesale layoffs in conjunction with the economic downturn. Continued claims are executed one week behind the main weekly number.

A year ago, that total was just $ 3.44 million, but it rose soon after due to mass layoffs in late March and early April.

California and New York accounted for most of the increase in jobs, with increases of 38,963 and 15,714, respectively, according to unadjusted data. These increases were offset somewhat by a decline of 13,944 in Alabama and 10,502 in Ohio.

Markets reacted little to the data, with futures on equities and mixed bond yields.

Despite recent progress, Federal Reserve officials say much more progress is needed in the labor field before thinking about changing policy.

The minutes of the most recent meeting of the Federal Open Markets Committee, published on Wednesday, indicated a better outlook for the economy, although an easy policy was needed.

Fed Gov. Lael Brainard told CNBC on Wednesday that the economic outlook has “brightened considerably,” but there are still about 9 million fewer workers than before the pandemic. Central bank officials have said they want to see not only full employment, but also inclusive earnings on the income, racial and gender lines.

“In that sense, we have a little bit of track before we get the results,” Brainard said.

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