FX.co ★ U.S. Weekly Jobless Claims Pull Back Off Two-Month High

On Thursday, the Labor Department issued a report indicating a significant decrease in first-time claims for U.S. unemployment benefits during the week ending April 6. This follows a two-month high reported in the previous week.

The Department noted that initial jobless claims decreased by 11,000, coming down to 211,000 from the previous week's revised 222,000. Analysts had projected that jobless claims would decrease to 215,000 from the previously reported 221,000 for the prior week.

The highest level for jobless claims since January 27 was the week ending March 30, with a reported 225,000 claims. The less volatile four-week moving average also showed a slight decrease, down by 250 to 214,250 from the previous week's revised average of 214,500.

In contrast, the number of continuing claims, or individuals seeking ongoing unemployment assistance, rose by 28,000 to a total of 1.817 million in the week ending March 30. The four-week moving average of continuing claims also increased, reaching 1,802,750 - a rise of 3,500 from the prior week's revised average of 1,799,250.

Michael Pearce, Deputy Chief U.S. Economist at Oxford Economics commented, "Despite the slowdown in hiring growth, net payroll growth remains strong due to low layoff rates in the economy, and there's no evidence from the claims data suggesting that this trend is changing." He further noted, "The strength of the labor market could potentially delay rate cuts by the Federal Reserve. The exact timing will depend on the Fed's confidence that inflation is on track to return to 2%."

It's worth noting that the Labor Department's closely-watched report from last Friday showed employment in the U.S. increased significantly more than anticipated in March. Non-farm payroll employment skyrocketed by 303,000 jobs following a revised increase of 270,000 jobs in February. This far exceeds the expected jump of 200,000 jobs compared to the 275,000 jobs reported for the previous month. Additionally, the report noted a slight dip in the unemployment rate to 3.8% in March from 3.9% in February, while economists predicted no change.