Initial jobless claims rose last week but remained generally low in a tight labor market.
Jobless claims for the week ended March 25 totaled 198,000, up 7,000 from the previous period and slightly higher than the estimate of 195,000, the Labor Department reported Thursday.
Although the figure was slightly above expectations, the overall figure suggests that companies have been slow to lay off workers despite expectations that the unemployment rate will rise later in the year.
Continuing claims trailing a week are up 4,000 to 1.689 million. That was below the FactSet estimate of 1.6935 million.
The four-week moving average of weekly claims, which smoothes volatility in the numbers, edged up to 198,250 but has been below 200,000 since mid-January.
The relatively benign claims numbers come despite aggressive Federal Reserve efforts to curb inflation. The central bank is largely targeting a labor market plagued by severe supply-demand imbalances, where there are almost two vacancies for every available worker.
According to estimates made last week, central bankers expect the unemployment rate to rise to 4.5% this year from the current 3.6%. That would require the loss of more than 540,000 jobs, according to an Atlanta Fed calculator.
“Although hiring numbers remain strong in the US economy, there appears to be potential for another lull in hiring trends over the spring and summer months,” said Stuart Hoffman, senior economic advisor at PNC. “This is not to say that economic conditions will collapse completely. Rather, newly laid-off workers are not as likely to be rehired as quickly as companies estimate their plans to weather what we expect will be a mild recession in the second half of this year.”
A separate economic report on Thursday showed that growth through to the end of 2022 was slightly weaker than previously thought.
The Commerce Department’s final gross domestic product figure showed the economy grew at an annual rate of 2.6% in the fourth quarter, slightly below the previous estimate of 2.7%. That change was mainly due to downward revisions in consumer spending and exports, the department said.
Growth likely accelerated in the first three months of 2023, according to the Atlanta Fed’s GDPNow tracker. This gauge shows that GDP is growing at a pace of 3.2%.
Markets reacted little to the new data, with futures pointing to a higher open on Wall Street.