Drop in Jobless Claims Counteracts March Data

Initial claims for state unemployment benefits dropped 42,000 to a seasonally adjusted 346,000, the Labor Department said on Thursday, unwinding a jump in the previous week that appeared related to difficulties adjusting the data for seasonal variations.

It was the largest weekly drop since mid-November. Economists, who had expected first-time applications for jobless aid to fall only to 365,000, said the decline suggested that the sharp slowdown in employment growth in March had been an aberration.

“We will see more job creation this month than we did in March, and today’s jobless claims numbers are consistent with that expectation,” said Robert A. Dye, chief economist at Comerica.

Employers added only 88,000 workers to payrolls in March — the smallest number in nine months — after a solid 268,000 increase in February.

Economists said the jobless claims data suggested that the slowdown in job creation reflected seasonal hiring being brought forward rather than underlying weakness in the labor market.

“All the March employment report provided a hint of is that jobs that normally would have got hired in March, some of them got hired earlier in February,” said Michael H. Strauss, chief economist at Commonfund.

Jobless claims are now back at the lower end of their range for this year, suggesting the labor market recovery remains on track.

The four-week moving average for new jobless claims, a better measure of labor market trends, increased 3,000 to 358,000. It remains close to a level economists normally associate with payroll gains of about 150,000 a month.

A second report from the Labor Department showed little sign of inflation. Import prices slipped 0.5 percent last month after rising 0.6 percent in February.

In the 12 months to March, import prices dropped 2.7 percent. Prices last month were subdued by a drop in the cost of petroleum and a strong dollar.

Article source: http://www.nytimes.com/2013/04/12/business/economy/drop-in-jobless-claims-counteracts-march-data.html?partner=rss&emc=rss