The Ministry of Labor published its last weekly report on unemployment benefits on Thursday at 8:30 a.m. ET. Here are the main print metrics, compared to the consensus estimates gathered by Bloomberg:
Initial unemployment applications, week ending April 2: 166,000 vs. 200,000 expected and revised 171,000 last week Ongoing receivables, week ended March 26: 1.523 million versus 1.302 million expected and revised 1.506 million last week
The number of new claims filed last week was the smallest in more than five decades and represented for the third consecutive week that the new claims were below 200,000. Last week’s new requirements were also revised significantly down to 171,000, from the 202,000 previously reported for the end of March. Prior to the pandemic, new applications averaged about 218,000 per week during 2019. Some of the instability in the latest weekly unemployment claims data probably reflects a change in the way the Department of Labor has adjusted the data to take seasonal factors into account. Starting with Thursday’s report, the Ministry of Labor returned to the use of “multiplier” seasonal adjustment factors for the data. During the pandemic, the Department of Labor used “additional” seasonal adjustment factors to help smooth out major changes to the data – as happened with the abnormal increases in unemployment claims during the first wave of lockdowns in 2020. “In times of relative economic stability, the multiplier option is generally preferred to the optional option,” the labor ministry said on Thursday. “However, in the presence of a large level shift in a time series, the multiplication factors of seasonal adjustment can lead to systematic hyper- or sub-adjustment of the series; in such cases, additional seasonal adjustment coefficients are preferred, as they tend to follow seasonal more accurate in the series and have smaller revisions “. The story goes on Even with the revisions, however, the underlying trend in data still reflects an incredibly tight job market, according to many economists. “The trend is flattening to an extremely low level,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in an email Thursday morning. “The new data show that the downtrend is more stable than the Covid Delta wave weakening, but it is now slowing down. Claims can not be zeroed; some companies are even struggling to reach the peak of the explosion,” he added. “Nevertheless, the clear message here is that the bar for redundancies is very high, given the extreme tightness of the labor market.” Ongoing claims, which track the total number of people claiming unemployment benefits in regular government programs, also rose unexpectedly in the latest report after a noticeable upward revision to last week’s data. These amounted to 1.523 million, up from the previously revised 1.506 million continuing receivables from the previous week, which were revised upwards from the previously mentioned 1.307 million. The latest data on weekly unemployment claims come after another steady monthly job report from the Ministry of Labor, which showed a significant increase in recruitment and a drop in the unemployment rate to a low of almost 50 years. Non-farm payrolls rose 431,000 in March, while the unemployment rate improved more than expected to 3.6%. And as of last month, the U.S. job market was just 1.6 million wages below pre-pandemic levels. “It is not surprising that inflation is out of control, the labor market is in full swing, where costs are rising astronomically for companies to bring in new workers to run factories and operate cash registers across the country,” said Chris Rupkey. , chief economist at FWDBONDS, wrote in a note earlier this week. “The cost-of-living crisis is being fueled and fueled by the worst labor shortages America has ever faced. Expecting more workers to join the workforce and ‘participate’ in reducing wages and inflation is a crazy dream.” The strong labor market has also encouraged the Federal Reserve to pursue a tighter monetary policy, including more aggressive interest rate hikes and a short-term balance sheet reduction process. Earlier this week, Federal Reserve Governor Lael Brainard said it was “extremely important” to reduce inflation, further reinforcing that the central bank had pledged to focus monetary policy efforts on lowering prices rather than optimizing for further employment growth. in an already close job. Buy. “The job market seems to be overcoming the pandemic, rapidly approaching a full recovery,” Rubeela Farooqi, chief US economist at High Frequency Economics, wrote in a note. “Although the labor market is tight, suggesting optimism about economic conditions, a four-decade high in prices has dampened expectations.” “Even as consumers’ balance sheets are healthy and they face concerns about the virus, there are negative risks that could weigh on household activity and economic activity in general in the future,” he added. – Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck Read the latest financial and business news from Yahoo Finance Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube and reddit
