Claims have been below 300,000 for 57 weeks now, longest stretch since 1973
WASHINGTON (Reuters) — The number of Americans filing for unemployment benefits fell more than expected last week, suggesting the labor market continued to strengthen despite tepid economic growth. Initial claims for state unemployment benefits declined 9,000 to a seasonally adjusted 267,000 for the week ended April 2, the Labor Department said on Thursday. Economists polled by Reuters had forecast claims slipping to 270,000 in the latest week. Jobless claims have now been below 300,000, a threshold associated with healthy labor market conditions, for 57 weeks, the longest stretch since 1973.
The labor market buoyancy is at odds with slowing economic growth. Recent data on consumer spending, business investment and international trade suggest growth slowed to below a one per cent annualized rate in the first quarter after expanding at an anemic 1.4 per cent pace in the fourth quarter.
With the strengthening labour market drawing in discouraged and new job seekers, which is likely to keep wage growth moderate, it is unlikely the Federal Reserve will shift from its policy of gradually raising interest rates.
U.S. financial markets were little moved by the claims report.
Government data last week showed about 2.4 million people entered or re-entered the job market between September and March, the second-largest increase in the labour force over a six-month period on record. Fed Chair Janet Yellen has argued that hidden labor market slack was restraining wage growth.
Fed officials last month downgraded their economic growth expectations and forecast only two more rate rises this year. The U.S. central bank raised its benchmark overnight interest rate in December for the first time in nearly a decade.
A Labor Department analyst said there were no specialfactors influencing last week's claims data, and only claims for Louisiana had been estimated.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, rose 3,500 to 266,750 last week.
Employers added 215,000 jobs in March, on top of the 245,000 positions created in February, the government reported last week. An increase in the labour force lifted the unemployment rate one-tenth of a percentage point to 5 per cent.
Thursday's claims report also showed the number of people still receiving benefits after an initial week of aid rose 19,000 to 2.19 million in the week ended March 26, but it remained in the lower end of its range for this year. The four-week average of the so-called continuing claims fell to 2.19 million.
