First-time claims for U.S. unemployment benefits unexpectedly increased in the week ended April 3rd, according to a report released by the Labor Department on Thursday.
The report said initial jobless claims edged up to 744,000, an increase of 16,000 from the previous week’s revised level of 728,000.
Jobless claims rose for the second straight week after falling to a one-year low of 658,000 in the week ended March 20th.
The continued increase surprised economists, who had expected jobless claims to drop to 680,000 from the 719,000 originally reported for the previous month.
The Labor Department said the less volatile four-week moving average also inched up to 723,750, an increase of 2,500 from the previous week’s revised average of 721,250.
Meanwhile, the report said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, dipped by 16,000 to 3.734 million in the week ended March 27th.
The four-week moving average of continuing claims fell to 3,862,000, a decrease of 105,750 from the previous week’s revised average of 3,967,750.
“Jobless claims may bounce around week to week as the recovery takes hold, but we expect they will start to decline more consistently as the economy gains momentum,” said Nancy Vanden Houten, Lead Economist at Oxford Economics.
She added, “We expect the stellar March jobs report to be the first of many and look for a hiring boom in the spring and summer months.”
Last Friday, the Labor Department released its more closely watched monthly employment, showing employment spiked by much more than expected in March.
The Labor Department said non-farm payroll employment surged up by 916,000 jobs in March after climbing by an upwardly revised 468,000 jobs in February.
Economists had expected employment to jump by 647,000 jobs compared to the addition of 379,000 jobs originally reported for the previous month.
The bigger than expected increase in employment reflected widespread job growth, with employment in the leisure and hospitality sector once again leading the way.
The stronger than expected job growth resulted in a continued decrease by the unemployment rate, which fell to 6.0 percent in March from 6.2 percent in February. The drop matched expectations.
With the decrease, the unemployment rate fell to its lowest level since hitting 4.4 percent in March of 2020, when coronavirus lockdowns were just starting to take effect.
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