Filed under: Employees, Economic data, Recession

U.S. Initial jobless claims fell 53,000 to 357,000 to for the week ended April 5, substantially below the consensus estimate, the U.S. Labor Department announced Thursday. Claims for the previous week were revised up 3,000 to 410,000.

Economists surveyed by Bloomberg News had expected this week’s initial jobless claims to total 386,000.

Also, the 4-week moving average increased 2,500 to 378,250. Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths out anomalies for strikes, holidays, or other idiosyncratic events.

The largest increases in initial claims for the week ending March 29 were Indiana (+7,443), New York (+4,123), Puerto Rico (+3,900), New Jersey (+3,294), and Kentucky (+2,840). The largest decreases were in Pennsylvania (-2,513), California (-1,595), Iowa (-895), Virginia (-800), and Illinois (-509).

The number of continuing claims increased by 3,000 to 2.940 million from a revised 2.837 million for the week ended March 29, the latest period for which figures were available.

Economic Analysis: This is a “teachable moment” weekly jobless report. Weekly jobless claims fell substantially to 357,000, giving the appearance of an improvement in claims. However, the key is the 4-week moving average, which rose by 2,500 to about 378,000 — a number well above the U.S. Federal Reserve’s danger level of 350,000. The U.S. Federal Reserve considers a 4-week average above 350,000 a signal of soft labor market conditions. Further, the continuing claims total, which measures the seasonally adjusted unemployed, also continued to track higher, at 2.940 million, also indicative of a tepid job market. In sum, the drop in weekly jobless claims underscores the inherent volatility of the weekly stat; the total can bounce around from week-to-week, due to several factors, which is why economists follow the 4-week moving average more closely. Jobless conditions remain a concern for the U.S. economy.

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