In the week ending May 4th, first-time applications for U.S. unemployment benefits rose more significantly than anticipated, as per a report from the Labor Department. Initial jobless claims surged to 231,000, marking an increase of 22,000 from the revised level of 209,000 seen in the previous week. This development defied economists' expectations, who had foreseen a subtle rise to 210,000 from the previously reported 208,000.
The surge pushed jobless claims to their highest since they reached 234,000 at the end of August. Oxford Economics Lead U.S. Economist Nancy Vanden Houten commented that if this level continues or sees further increases, it could indicate a further relaxation of labor market conditions. However, she emphasized that a week's data does not change the expectation of the Federal Reserve maintaining current interest rates until September.
The Labor Department also reported that the less fluctuating four-week moving average of jobless claims increased to 215,000, a rise of 4,750 from the revised average of 210,250 from the previous week. Meanwhile, continuing claims, which measure the total number of people receiving ongoing unemployment assistance, also escalated by 17,000 to 1.785 million for the week ending April 27th.
In contrast, the four-week moving average of continuing claims lessened to 1,781,000, a reduction of 6,250 from the revised average of 1,787,250 from the previous week. A separate report issued by the Labor Department found that U.S. employment in April grew less than expected. Non-farm payroll employment increased by 175,000 jobs in April, a value significantly smaller than the revised 315,000 jobs of March.
Contrary to convictions of economists predicting a surge by 243,000 jobs after the increment of 303,000 jobs in the previous month, the unemployment rate subtly rose from 3.8% in March to 3.9% in April, an unexpected growth.