US unemployment edges up more than expected

Washington — The number of Americans filing new claims for unemployment benefits rose more than expected last week as labour market conditions ease.

Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 221,000 for the week to March 30, the labor department said on Thursday. Economists polled by Reuters had forecast 214,000 claims in the latest week.

Claims had bounced around from 212,000 to 210,000 for much of March. There were 1.36 job openings for every unemployed person in February compared with 1.43 in January, official data showed this week.

Worker shortages persist in industries such as construction.

Though layoffs rose to a 14-month high in March, job cuts were little changed compared with those of the matching period in 2023.

Labour market resilience is anchoring the economy, with GDP rising at a brisk 3.4% annualised rate in the fourth quarter. Growth estimates for the first quarter are as high as 2.8%. That strength, combined with the high inflation, could see the Federal Reserve delaying a keenly awaited interest rate cut in 2024.

Fed chair Jerome Powell said again on Wednesday that the US central bank has time to consider its first rate cut, in a nod to the economy’s stamina and high inflation.

Since March 2022, the Fed has raised its policy rate by 525 basis points to the present 5.25%-5.50% range.

The number of people getting benefits after an initial week of aid, a proxy for hiring, fell 19,000 to 1.791-million during the week to March 23, the claims report showed.

The claims figure has no bearing on March’s employment report due to be released on Friday, as they fall outside the survey period. Nonfarm payrolls likely rose by 200,000 jobs in the last month after rising by 275,000 in February, according to a Reuters survey.

The unemployment rate is forecast to stay at 3.9%.

Reuters