The claims for unemployment benefits officially fell by 18,000 in the last week. However, the new seasonal adjustments now mean that they are, in reality, higher than what was originally estimated. On Thursday, the Labor Department reported that the official number of jobless claims was 228,000, higher than the original estimate of 200,000. And it was above the last week’s original 198,000 estimates.
Claims hovered near about 200,000 mark in recent weeks. It is a level considered a signal of a healthy job market. This is so even as large companies like Amazon, Microsoft, and others have announced layoffs.
This report came one day before the government released the March job survey. It came with expectations for a gain of around 240,000 job opportunities.
This Tuesday, data pointed out that job openings had fallen by about 700,000 at the end of February to 9.9 million. And the March month’s reading was the lowest since the year 2021.
The Fed is watching the labor market for signals that it is softening. Also, reduced worker demand may ease pressure on wages, a key factor in inflation.
ADP (a private payroll firm) said on Wednesday that 145,000 job opportunities were created last month. ADP said the annual wage growth slipped from 7.2 percent in February to 6.9 percent in March.
A research economist at Abrdn (a Scottish investment company), Abigail Watt, wrote that Friday’s labor market report is crucial for markets. This is when investors try to understand how the Fed shall weigh up the conflicting forces it is facing at the present moment. She further wrote that Jobs’ growth has been hotter than expected this year. Any upside-changing surprises shall add to the difficulty faced by the Federal Reserves.
Wall Street Journal reported that filings for jobless claims were higher than expected in recent weeks. It was a signal of easing demand for labor as the labor market cooled.
The Labor Department said the jobless claims had reached about 250,000 a week in the middle of March, 50,000 higher than previously reported. The March month’s average of weekly claims was about 237,750, which is higher than the average (less than 200000). And claims declined from about 18,000 to 228,000 in the week that ended on April 1.
The changes and shifts in the labor market
The Labor Department added that the revisions have better adjusted for pandemic-connected factors and provide a better accurate picture of present levels of claims. Further, layoffs have hit finance, technology, and other industries and sectors recently, but claims figures have not reflected those developments.
The chief U.S. economist at Santander, Stephen Stanley, urged people to take caution in interpreting the new claims figures. Still, he also said that the revisions suggested layoff announcements are starting to appear. Goldman Sachs has also cautioned against reading much into the changes.
The number of people seeking ongoing unemployment benefits has increased by about 6,000 from the last week’s revised level to 1.8 million in the week ending on March 25. And it was the highest level for continuing claims since December 2021.
On Friday, the Labor Department shall release the March employment report. That shall offer a broader picture of the condition of the jobs market. Further, the job gains and the unemployment rate shall show how the labor market has fared as the economy of the U.S.A. hit an unusually rough patch.