New applications for US jobless benefits rose slightly more than expected last week, but a drop in the number of Americans on unemployment rolls to a 17-year low suggested the labor market continues to tighten. Other data on Thursday showed factory activity in the mid-Atlantic region slowed in April amid a pullback in new orders and shipments. But factories hired more workers and increased working hours, underscoring the labor market’s strength.
Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 244,000 for the week ended April 15, the Labor Department said on Thursday. The increase followed three straight weeks of declines.
Claims have now been below 300,000, a threshold associated with a healthy labor market, for 111 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller. The labor market is close to full employment, with the unemployment rate at a near 10-year low of 4.5 percent.
Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 242,000 last week.
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The rise in applications likely is linked to volatility around this time of the year due to the different timings of spring and Easter holidays, which often throws off the model the government uses to smooth the data of seasonal fluctuations.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,250 to 243,000 last week. US financial markets were little moved by the data.
In a separate report, the Philadelphia Federal Reserve said its index for current manufacturing activity fell to a reading of 22.0 this month from 32.8 in March. The index has been positive for nine consecutive months and remains at a relatively high reading.
Firms reported an increase in manufacturing employment and work hours this month. The current employment index improved 2 points, its fifth consecutive positive reading.
The claims data covered the survey week for April nonfarm payrolls. Claims declined 17,000 between the March and April survey periods, suggesting that job growth likely picked up this month. Nonfarm payrolls increased by 98,000 jobs in March, the fewest since May 2016.
An acceleration in employment growth would confirm that March’s moderation was weather-driven and underscore the economy’s strong fundamentals despite indications that growth slowed to below a 1.0 percent annualized rate in the first quarter.
Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid decreased 49,000 to 1.98 million in the week ended April 8. That was the lowest reading since April 2000. The four-week moving average of the so-called continuing claims fell 2,000 to 2.02 million, the lowest reading since June 2000.