Initial jobless claims drop but remain above levels that signal hiring gains; inflation fades
The number of newly laid-off workers requesting jobless benefits fell slightly last week for the third straight time. But initial claims remain above levels that would signal net job gains.
New claims for unemployment insurance fell 5,000 to a seasonally adjusted 457,000, the Labor Department said Thursday. That nearly matched analysts’ estimates of 455,000, according to Thomson Reuters.
The four-week average of jobless claims, which smooths out volatility, dropped to 471,250. Still, the average has risen by 30,000 since the start of this year. That’s raised concerns among economists that persistent unemployment could weaken the recovery.
The average number of weekly jobless claims remains above the 400,000-to-425,000 level that many economists say it must fall below before widespread new hiring is likely.
In a separate report, the department said consumer prices were flat in February. A rise in food prices was offset by a drop in gasoline and other energy costs. Excluding the volatile food and energy categories, the core Consumer Price Index edged up just 0.1 percent last month, matching economists’ estimates.
The report adds to evidence that the weak economy has all but erased inflation. That allows the
Initial claims are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire new workers. High unemployment has persisted even though the economy grew in the second half of last year.
The number of people continuing to claim unemployment benefits rose slightly to 4.58 million. That was similar to what economists expected. But it doesn’t include millions of people who are receiving extended benefits for up to 73 extra weeks, on top of the 26 weeks customarily provided by the states.
More than 6 million people were on the extended benefit rolls for the week that ended Feb. 27, the latest data available. That is about 300,000 more than in the previous week. The total number of people receiving benefits now tops 11.2 million.
Over the past two months, “this measure has gone nowhere but up,” Dan Greenhaus, chief economic strategist at Miller Tabak, wrote in a note to clients. “We believe it will moderate through the spring, but the larger story, that people are simply not finding jobs, remains in place.”
The nation’s gross domestic product, the broadest measure of output, rose 5.9 percent in the fourth quarter, the fastest pace in six years. But much of that growth reflected a one-time gain from companies restocking their inventories. Many economists expect the growth rate to drop to about 3 percent in the current January-to-March quarter.
The unemployment rate was 9.7 percent in February, the same as the previous month, down from a peak of 10.1 percent last October. Still, the
The Fed said Tuesday that “the labor market is stabilizing.” That’s an improvement from its previous diagnosis in January, when it said its deterioration “is abating.”
Among states, North Carolina had the largest increase in claims, with 5,100. It attributed the increase to layoffs in the construction, apparel and industrial machinery industries.
Illinois, Oregon, Ohio and Alabama had the next-largest increases. The state data lags one week behind the initial claims figures.
New York had the largest drop in claims, with 10,929. It cited fewer layoffs in transportation and services. California, Connecticut, Kentucky and West Virginia also reported declines.