Weekly unemployment claims higher than expected

Initial claims for unemployment insurance rose more than expected last week, despite other signs of recovery in the job market, the Labor Department reported Thursday.

Initial claims for the week ending April 3 totaled 744,000, well above the expectation of 694,000 economists surveyed by Dow Jones. The total represented an increase of 16,000 from the upward revised 728,000 from the previous week. The four-week moving average rose to 723,750.

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

That was the biggest job growth since August 2020, although the unemployment rate is still well above the pre-pandemic low of 3.5%.

Persistent claims brought good news in the field of labor: the total fell by 16,000 to 3.73 million. That’s the lowest level for persistent claims since March 21, 2020, just after the Covid-19 pandemic and companies have instituted widespread layoffs coupled with the economic shutdown. Persistent claims are a week behind the weekly headline issue.

A year ago, that total was just 3.44 million, but it rose shortly afterwards due to massive layoffs in late March and early April.

According to unadjusted data, California and New York were responsible for most of the increase in the number of jobs, with 38,963 and 15,714 increases, respectively. Those increases were somewhat offset by a decrease of 13,944 in Alabama and 10,502 in Ohio.

Markets were poorly responsive to the data, with mixed returns on equity futures and government bonds.

Despite recent progress, Federal Reserve officials say much more progress is needed on jobs before considering a policy change.

Minutes of the most recent Federal Open Market Committee meeting, released Wednesday, indicated that there is a brighter outlook for the economy, although a need for simple policies remains.

Fed Governor Lael Brainard told CNBC on Wednesday that the economic outlook has “improved significantly,” 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 inclusive income, race and gender gains.

“In that sense, we still have some distance to go before the results are achieved,” said Brainard.

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