Dollar rebounds after sliding over Trump’s comments; consumer sentiment lifts Treasury yields off lows
The number of Americans filing for unemployment benefits unexpectedly fell last week, suggesting the labor market remains strong despite a sharp slowdown in job growth in March.
Other data on Thursday showed producer prices falling in March for the first time in seven months. Prices, however, recorded their biggest year-on-year increase in five years. The reports pointed to a steadily firming economy and could allow the Federal Reserve to increase interest rates again in June.
Initial claims for state unemployment benefits slipped 1,000to a seasonally adjusted 234,000 for the week ended April 8, the Labor Department said. That was the third straight weekly decline in claims and left them not too far from a 44-year low of 227,000 hit in February.
“Claims remain low, adding to the evidence that the slowing in payrolls in March was due to weather effects,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.
Claims have now been below 300,000, a threshold associated with a healthy labor market, for 110 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the unemployment rate close to a 10-year low of 4.5 percent.
Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 245,000 last week. Claims tend to be volatile around this time of the year because of the different timings of spring and Easter holidays.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,000 to 247,250 last week. The low level of claims suggests that a sharp slowdown in job growth in March was an aberration and that the labor market continues to tighten.
Nonfarm payrolls increased by 98,000 jobs last month, the fewest since last May.
U.S. financial markets were little moved by the data as investors continued to digest comments by President Donald Trump to the Wall Street Journal late on Wednesday that the dollar was “getting too strong” and that he preferred a “low-interest rate policy.”
