Unemployment insurance states edge up to 198,000, much more than anticipated

March 31, 2023: Initial filings for unemployment insurance ticked higher in the previous week but remained generally low in a tight labour market.

Jobless claims ended March 25 totalled 198,000, up 7,000 from the last period and a bit increased from the 195,000 estimates, the Labor Department reported on Thursday.

Though the number was a little higher than anticipations, the total indicates that firms are slow to lay off workers despite anticipations that the jobless rate will increase throughout the year.

Continuing claims ran a week behind and edged up 4,000 to 1.689 million. That was below the FactSet estimate of 1.6935 million.

The four-week going average of weekly claims, which shines volatility in the numbers, increased to 198,250 but has been below 200,000 since mid-January.

Although aggressive Federal Reserve grinds to slow inflation, the relatively benign claims numbers come. The majority, the central bank, targets a labour market beset by a strong supply-demand imbalance in which nearly two open jobs exist for every available worker.

In the previous week, according to estimates, central bankers expect the unemployment rate to increase to 4.5% in 2023 from its current 3.6% level. According to an Atlanta Fed calculator, doing so would require a loss exceeding 540,000 jobs.

“Although hiring in the U.S. economy remains strong, comes to be the potential for more slack which hires trends set for the spring and summer months,” Stuart Hoffman, senior economic advisor, stated at PNC.

“This is not to state that economic rules are set to collapse entirely. Rather, newly laid-off workers are less likely to be rehired as businesses assess their ideas to weather what we anticipate will be a mild slump in the second half of this year.”

On Thursday, a separate economic report showed that growth was slightly weaker to close 2022 than previously thought.

The final Commerce Department going through for gross domestic product showed the economy increased at 2.6% annualized prices in the fourth quarter, slightly below the last estimate of 2.7%. The department said that change came primarily from downward consumer spending and exports revisions.