THE number of Americans filing new claims for unemployment benefits hit a four-month high last week, suggesting the labour market recovery ran out of steam in March.
Initial claims for state benefits increased 28,000 to a seasonally adjusted 385,000, the highest level since November, the labour department said yesterday.
It was the third straight week of gains in claims and confounded economists’ expectations of a drop to 350,000.
Coming on the heels of data on Wednesday showing private employers added the fewest jobs in five months in March, the report implied some weakening in jobs’ growth after hiring accelerated in February.
The four-week moving average for new claims, a better measure of labour market trends, rose 11,250 to 354,250. “It does look like recently we’ve seen some stalling in job creation, or at least a stalling in the lowering of claims,” said Tim Ghriskey, chief investment officer at Solaris Group in Bedford Hills, New York.
Last week’s claims’ data was probably distorted by the Easter, Passover and spring breaks for schools, which this year were early. That could make it difficult to smooth out the figures for seasonal fluctuations. A Labour department analyst said claims for California and the Virgin Islands had been estimated.
US stock futures cut gains after the data was released, but Treasury debt prices rose.
While the claims report has no bearing on today’s non-farm payrolls data for March, as it falls outside the survey period, it hinted at some weakness in hiring.
Employers are expected to have added 200,000 jobs to their payrolls last month, according to a Reuters survey, slowing from February’s brisk 236,000. The jobless rate is seen unchanged at 7.7 per cent.
Factory activity grew at its slowest pace in three months in March. Growth in the services sector was the weakest in seven months.
The labour market is key to Federal Reserve chairman Ben Bernanke’s monetary policy.