Job cuts up 35 per cent in April
WASHINGTON (Reuters) — The number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest gain in more than a year, but the underlying trend continued to point to a strengthening labour market.
Another report on Thursday showed a 35 per cent surge in planned layoffs by U.S.-based employers last month. Most of the announced job cuts were concentrated in the energy sector, which is reeling from low oil prices that have hurt profits.
Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 274,000 for the week ended April30, the Labor Department said. Last week's increase was the largest since February of last year.
"We are assuming the move in claims is largely technical. By all accounts, businesses cannot find the skilled labor they need," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.
Economists polled by Reuters had forecast initial claims rising to 260,000 in the latest week. Jobless claims have now been below 300,000, a threshold associated with healthy labour market conditions, for 61 consecutive weeks, the longest stretch since 1973. The four-week moving average of claims, considered a bettermeasure of labor market trends as it irons out week-to-weekvolatility, rose 2,000 to 258,000 last week.
Prices for U.S. government debt slightly pared losses after the data, while the U.S. dollar edged up against a basket of currencies. U.S. stock futures were trading higher.
The latest claims data has no bearing on April's employment report as it falls outside the survey period.
Claims were generally low in April compared to March. That points to a fairly robust labour market despite a report on Wednesday showing hiring by employers in the private sector last month was the weakest in three years.
Though the ADP National Employment Report showed a slowdown in services industry hiring last month, an Institute for Supply Management survey showed employment in the services sector increased in April for a second straight month.
'HEAVY JOB CUTS'
In a second report on Thursday, global outplacement firm Challenger, Gray & Christmas said U.S.-based companies announced 65,141 job cuts last month, up 35 per cent from March. The energy sector announced another 19,759 job cuts in April, bringing its total layoffs this year to 72,660. They were also layoffs in the information technology and retail sectors.
"It is not unusual to see heavy job cuts in a strong economy. Companies are constantly retooling, and sometimes the best time to do that is when the economy is strong," said John Challenger, the chief executive officer of Challenger, Gray & Christmas.
According to a Reuters survey of economists, the Labor Department is expected to report on Friday that nonfarm payrolls increased by 202,000 jobs in April after a gain of 215,000 in March. The unemployment rate is seen holding steady at five per cent and average hourly earnings are forecast rising 0.3 per cent for a second consecutive month.
Thursday's claims report showed the number of people still receiving benefits after an initial week of aid fell 8,000 to 2.12 million in the week ended April 23, the lowest level since November 2000.
The four-week average of the so-called continuing claimsdeclined 17,000 to 2.14 million, also the lowest reading sinceNovember 2000.