The number of Americans filing for unemployment benefits unexpectedly rose last week, but a sharp drop in layoffs in March suggested the labor market momentum remained intact.
Labor market strength, however, has not been accompanied by robust wage growth, making it unlikely the Federal Reserve will raise interest rates soon. The U.S. central bank is also keeping a cautious eye on international developments.
Initial claims for state unemployment benefits increased 11,000 to a seasonally adjusted 276,000 for the week ended March26, the Labor Department said on Thursday. Economists had forecast claims remaining unchanged at 265,000 in the latest week.
“Claims remain at a level that is consistent with low rates of involuntary job separation and this report, similar to other labor market-related releases for March, points to no significant shift in labor market trends at the end of the first quarter,” said John Ryding, chief economist at RDQ Economics in New York.
Applications for unemployment benefits have now been below 300,000, a threshold associated with healthy labor market conditions, for 56 weeks, the longest stretch since 1973. With the labor market continuing to tighten, there is probably little scope for significant further declines in claims.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 3,500 to 263,250 last week.
In a separate report, global outplacement consultancy Challenger, Gray & Christmas said U.S.-based employers announced 48,207 jobs cuts this month, down 21.7 percent from February.
“Job cuts have slowed since surging in the first two months of the year,” said John Challenger, chief executive officer of Challenger, Gray & Christmas.
U.S. Treasury prices rose, while the dollar fell against a basket of currencies. U.S. stocks were trading higher.