AFP/APP – First-time claims for US jobless benefits rose modestly last week but were still at historically low levels, pointing to the continued health of labor markets, government data showed Thursday.
The new figures suggest the jobs market could again see robust growth this month as they were collected during the survey week for the Labor Department’s closely-watched monthly employment report due out April 6.
Workers are becoming increasingly scarce amid very low unemployment but last month employers added a stunning 313,000 net new positions, possibly due to employees coming off the sidelines and rejoining the workforce.
For the week ending March 17, new claims for unemployment insurance rose by 3,000 to 229,000, marginally above analyst expectations which had called for a token decrease of 1,000 claims, according to the Labor Department report.
The less volatile four-week moving average also rose 2,250 to 223,750 claims.
Jobless benefits claims have now held below the symbolic level of 300,000 for nearly three years, the longest stretch since 1973. But economists say the level is probably the lowest ever, given demographic changes in the last 50 years.
“Labor is so scarce that the bar for layoffs is now very high,” Ian Shepherdson of Pantheon Macroeconomics said in a client note.
And adjusting for population growth, the current trend was the lowest since statistics began in 1948, he said.
Though they can see big swings from week to week, jobless claims are used to gauge the health of labor markets and the prevalence of layoffs.
“Clearly, firms aren’t firing people without a very good reason, presumably because it’s so hard to replace them later,” Shepherdson said.
Tight jobs markets can spur inflation, adding pressure on the central bank to raise interest rates more quickly — a prospect that has worried investors in recent weeks.
But Fed Chairman Jerome Powell said Wednesday that economic data does not suggest the world’s largest economy was “on the cusp of an acceleration of inflation.”