Unemployment Claims Post Largest Increase in Nearly Two Years
The number of Americans filing applications for unemployment benefits saw their largest increase in 19 months last week, the Labor Department reported Thursday.
Initial claims for state unemployment benefits jumped 37,000 to a seasonally adjusted 230,000 for the week ended April 20, the department said.
“Jobless claims continue to point to tight labor market conditions,” said Bloomberg economist Eliza Winger in an analyst’s note. “The number of workers filing new applications for unemployment increased more than expected, but it is not unusual to see some volatility in the week before or after the Easter holiday. Jobless claims will likely revert back to the pre-holiday trend.”
The instability around Easter and Passover is often attributed to school closures around those holidays. The same goes for spring break. In some states school employees are eligible for unemployment benefits if they aren’t being paid during the week.
The increase was the largest since early September 2017, and it seemed to surprise economists who had predicted claims rising to only 200,000 last week.
Only a week before claims had dropped to 193,000, which was the lowest level since September 1969.
The 4-week moving average was 206,000, an increase of 4,500 from the previous week’s revised average. The previous week’s average was revised up by 250 from 201,250 to 201,500.
Despite the volatility, the labor market remains strong. Job gains averaged 180,000 in the first quarter, well above the roughly 100,000 jobs per month needed to keep up with growth in the working-age population.
The unemployment rate is currently 3.8 percent, close to the 3.7 percent Federal Reserve officials project it will be by the end of the year.
