Weekly jobless claims higher than expected

First-time unemployment insurance claims rose more than expected last week despite other signs of healing in the labor market, the Labor Department reported Thursday.

The first claims for the week ended April 3 totaled 744,000, well above the expectations of 694,000 economists polled by Dow Jones. The total represented an increase of 16,000 from the revised upward 728,000 of the previous week. The four-week moving average edged up to 723,750.

The news comes a week after a sign of a more aggressive recovery in the labor market, as non-farm payrolls in March rose 916,000 as the unemployment rate fell to 6%.

It was the biggest job gain since August 2020, although unemployment remains well above the pre-pandemic low of 3.5%.

Continuing claims provided good news on the labor front, with the total dropping from 16,000 to 3.73 million. This is the lowest level of continuing claims since March 21, 2020, just after the Covid-19 pandemic hit, and companies have instituted wholesale layoffs in conjunction with the economic shutdown. Continuing claims run a week behind the weekly headline number.

A year ago, that total was only 3.44 million, but jumped soon after due to massive layoffs in late March and early April.

California and New York accounted for the bulk of the employment gain, with increases of 38,963 and 15,714, respectively, according to unadjusted data. These increases were somewhat offset by a drop of 13,944 in Alabama and 10,502 in Ohio.

Markets reacted little to the data, with yields on equity futures and government bonds mixed.

Despite recent progress, Federal Reserve officials believe much more progress is needed on the jobs front before considering policy change.

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The minutes of the last meeting of the Federal Open Market Committee, released on Wednesday, indicated better prospects for the economy, although a continued need for easy policies.

Fed Governor Lael Brainard told CNBC on Wednesday that the economic outlook had “improved dramatically,” but there were still around 9 million fewer workers than before the pandemic. Central bank officials have said they want not only full employment but also inclusive gains in terms of income, race and gender.

“In that sense, we still have a long way to go before results are achieved,” Brainard said.

This is the latest news. Please come back here for updates.

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