Another 166,000 Americans filed new claims last week

First-time jobless claims in the US fell much more than expected last week to their lowest level since 1968, with the rate of new layoffs and layoffs remaining low compared to pre-pandemic averages.

work circle It released its latest weekly report on unemployment claims Thursday at 8:30 a.m. ET. Here are the key metrics from the print edition, compared to consensus estimates compiled by Bloomberg:

Initial jobless claims, week ending April 2nd: 166,000 vs. 200,000 expected and 171,000 revised over the previous week
Continuing Claims, week ending March 26: 1.523 million against. 1.302 million expected and 1.506 million during the previous week

The number of new claims filed last week was the lowest in more than five decades and represented the third consecutive week that new claims were below 200,000. Last week’s new claims were also revised significantly downward to 171,000 from 202,000 previously reported at the end of March. Before the pandemic, new claims averaged about 218,000 per week throughout 2019.

Some of the fluctuations in the latest weekly jobless claims data likely reflect a change in the way the Labor Department adjusted numbers to take into account seasonal factors. Beginning with Thursday’s report, the Labor Department reverted to using “multiple” seasonal adjustment factors for the data. During the pandemic, the Department of Labor has been using “additive” seasonal adjusting factors, which help facilitate large shifts in data — as was the case with the anomalous increases in unemployment claims that occurred during the first wave of lockdowns in 2020.

“In times of relative economic stability, the multiplier option is generally preferred over the additive option,” the Labor Department said Thursday. “However, in the presence of a large shift in level in a time series, seasonal multiplexing factors can lead to regular or imperfect adjustment of the series; in such cases additional seasonal adjustment factors are preferred because they tend to track seasons. More subtle fluctuations in the series. And it has smaller reviews.”

Continuing Claims, which tracks the total number of individuals claiming unemployment benefits across regular state programs, also rose unexpectedly in the latest report after a marked upward revision to the previous week’s data. This came in at 1.523 million, up from 1.506 million continuing claims from the previous week, which was revised up from 1.307 million previously.

The latest weekly jobless claims data comes on the heels of Another strong monthly jobs report from the Department of Labor, Which showed a huge rise in employment and a drop in the unemployment rate to its lowest level in 50 years. Nonfarm payrolls grew by 431,000 in March, while the unemployment rate improved by a larger-than-expected margin to 3.6%. As of last month, the US labor market was about 1.6 million jobs below pre-pandemic levels.

Chris Robke, chief economist at FWDBONDS, wrote in a note earlier this week. “The cost of living crisis is aided and abetted by the worst labor shortage America has ever faced. Waiting for more workers to join the workforce and ‘participate’ in order to lower wages and inflation is a perfect dream.”

The strong labor market also encouraged the Federal Reserve to proceed with further monetary tightening, including more sharp interest rate increases and the process of balance sheet cuts starting in the near term. Earlier this week, Federal Reserve Governor Lyle Brainard He said it was “critical” to lower the inflation rate, and strengthen the central bank committed to focusing monetary policy efforts on lowering prices rather than improving employment growth in an already tight labor market.

“The labor market appears to be weathering the pandemic, rapidly approaching a full recovery,” Rubella Farooqui, chief US economist at High Frequency Economics, wrote in a note. “Even as the labor market tightens, indicating optimism about economic conditions, a four-decade price hike dampens expectations.”

“Although consumer balance sheets are healthy and facing virus concerns, there are downside risks that could weigh on household and broader economic activity going forward,” she added.

–

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck