While U.S. initial jobless claims pulled back in the week ending April 5 from its 2.5-year high reached the week before, economists say the overall trend is still creeping up into recession territory.
U.S. initial jobless claims came in lower than expected in the week ending April 5. A total of 357K initial jobless claims were filed; forecasts were looking for a total of 383k claims. The previous week's figure was revised to 410k from 407k - both are two-and-a-half year highs.
The good news for the U.S. labour market didn't extend into continuing claims, which rose to 2940k - the highest level since July 2004. Forecasters were calling for a decline to the 2935k level from the previous week's 2937k.
The four-week moving average of initial claims increased to 378,250 from 375,750. All figures were adjusted for seasonal factors by the Department of Labor.
Initial jobless claims spiked at 407,000 in the previous week, though economists say the latest figures support the view that it was largely due to seasonal adjustments around the movable Easter holiday.
Michael Feroli, a U.S. economist at JPMorgan Economics, said the ongoing strike at auto parts supplier American Axle may be adding more than the usual amount of noise to the weekly data.
"In this environment, the four-week moving average ... is probably sending the right message that through the volatility, claims remain in a fairly elevated range," he noted.
Ian Shepherdson, chief U.S. economist at HFE, noted that the eight-week moving average nudged up to 363.3k, "slightly higher than the level prevailing in early March 2001, at the start of the last recession."
"As far as we can tell, companies are increasingly taking the view that the slowdown will be longer, deeper and broader than they have been expecting, and layoffs are the only way to cut costs rapidly enough to support earnings growth," he said. "The next couple of weeks' numbers could be very erratic but the trend is clear."
By Stephen Huebl and edited by Nancy Girgis