Last week, the amount of Americans filing for unemployment benefits unexpectedly increased hitting the highest level seen in over a year. This heightens fears about the health condition of the labor market in the midst of a slowdown in job gains last month. Initial claims for state unemployment benefits advanced 20,000 to a seasonally adjusted 294,000 for the week ended May 7, the highest level since late February 2015, the Labor Department noted on Thursday. Despite last week’s hike, claims remained under the 300,000 threshold associated with healthy job market conditions, for 62 weeks straight, the longest stretch in over 40 years.
A Labor Department analyst note, there were no special factors swaying last week’s claims data and no states had been predicted. There was a spike in claims in New York and Michigan in the latest week. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, gained 10,250 to 268,250 last week, the highest level in almost 90 days. The claims report came after data last week showing nonfarm payrolls advanced only 160,000 in April, the smallest increase in seven months, after increasing by 208,000 in March.
The labor market has been moderately healthy despite a sharp slowdown in economic growth in the first quarter. The hike in jobless claims and moderation in employment gains likely do not endorse a deterioration given difficulties adjusting the data for seasonal fluctuations. A report on Tuesday displayed job openings hit an eight-month high in March, with the rate re-testing its post-recession high. The four-week average of the so-called continuing claims dropped 3,750 to 2.14 million, the lowest reading in almost 16 years.