US initial jobless claims tick a little higher

The number of Americans filing for unemployment benefits unexpectedly picked up last week, according to data from the Labor Department.

US initial jobless claims rose by 3,000 from the previous week's unrevised level to 229,000, versus expectations for a drop to 225,000.

Meanwhile, the four-week moving average was up 2,250 to 223,750 from the previous week's average, which was also unrevised. The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

The Labor Department said claims-taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.

Continuing claims - i.e. the number of people already collecting unemployment benefits - fell by 57,000 to 1.83m, while the previous week's level was revised up by 6,000 to 1.89m. The four-week moving average was 1.88m, down 11,750 from the previous week's average, which was revised up by 1,500. This marked the lowest level for this average since 5 January 1974, when it was 1.84m.

Pantheon Macroeconomics said: "Our take on the seasonals pointed to a slightly lower number but no matter; the data are erratic week-to-week and what counts is the trend, which is now firmly establishd below 230K. Adjusted for population growth, that's the lowest since start of the weekly series in 1948. Clearly, firms aren't firing people without a very good reason, presumably because it's so hard to replace them later.

"With measures of labour demand also very stretched, we think 200K-plus payroll gains through the spring, at least, remain a very good bet. Note that the claims data over the next few weeks likely will be more volatile than usual; the shifting date of the Easter holiday from year-to-year is a problem for the seasonal adjustment process."