The number of Americans filing new claims for unemployment benefits rose marginally last week, indicating the labour market remained on solid footing despite slowing economic growth.
Output has slowed in the first quarter, undercut by a harsh winter, a strong dollar, weaker overseas growth and a now-settled labour dispute at West Coast ports, mostly transitory factors that should fade by the second quarter.
The Federal Reserve on Wednesday acknowledged the moderation in growth, but maintained its upbeat view of the jobs market and signalled it was nearing an interest rate increase by dropping the reference to being “patient” from its so-called forward guidance.
Initial claims for unemployment benefits rose 1,000 to a seasonally-adjusted 291,000 for the week ended March 14, the Labor Department said yesterday. The increase was broadly in line with economists’ expectations.
Prices for US Treasuries dipped while the dollar widened its gains against the euro and yen after the data. US stock index futures were indicating a slightly weaker open.
Claims have bounced around for much of the winter as harsh weather caused a swing in filings. But through the volatility, the trend remained consistent with a strengthening jobs market.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,250 to 304,750 last week.
The claims data covered the period during which the government surveyed employers for the March nonfarm payrolls report. The four-week moving average of claims rose 21,750 between the February and March survey periods, suggesting payroll growth could ease a bit after last month’s robust gain.
The economy added 295,000 jobs in February, with the jobless rate falling to a more than 6 1/2-year low of 5.5%. February marked the 12th straight month that employment gains have been above 200,000, the longest such run since 1994.
The Fed said it would need to see “further improvement in the labor market” before tightening monetary policy.
Many economists believe the first rate hike since 2006 could come in June, though financial markets are pricing in a September move. The Fed has kept its short-term interest rate near zero since December of 2008.
In a separate report, the Commerce Department said the current account gap, which measures the flow of goods, services and investments into and out of the country, increased to $113.5bn from $98.9bn in the third quarter.
That was the largest shortfall since the second quarter of 2012.
The fourth-quarter current account deficit represented 2.6% of GDP, the highest since the fourth quarter of 2012.
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