Applications for US unemployment benefits fell last week by the most since July, as claims in New York plunged, reversing a spike in the previous week.
(Bloomberg) — Applications for US unemployment benefits fell last week by the most since July, as claims in New York plunged, reversing a spike in the previous week.
Initial unemployment claims decreased by 20,000 to 192,000 in the week ended March 11, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 205,000 applications.
Weekly claims tend to be bumpy. In New York, figures in the prior week may have been boosted by New York City school workers like bus drivers and cleaning staff who have negotiated into their contracts the ability to file for unemployment benefits when there’s a school break, according to Stephen Stanley, chief US economist at Santander US Capital Markets LLC.
“Every year, we see these brief spikes in claims applications after the week-long winter and spring breaks at NYC schools,” Stanley said in a note.
On an unadjusted basis, claims fell to 217,444 as New York unwound most of its jump from the prior week. In that period, applications also surged in California, where severe weather may have played a factor.
Continuing claims, which include people who have received unemployment benefits for a week or more, fell by 29,000 to 1.68 million in the week ended March 4. Economists watch this measure closely to discern how hard it is for people to find work after losing their job.
The data show continued strength in an extremely tight labor market, marked by robust job creation, millions of openings and low unemployment. However, several measures of wage growth are slowing and largely still lag inflation, which could be starting to weigh on spending. And layoffs at companies like Meta Platforms Inc. keep piling up.
What Bloomberg Economics Says…
“Jobless claims fell back below 200k last week but we still expect layoffs to rise sharply ahead, spreading from tech and finance to other sectors. Many businesses have planned for a downturn this year, and layoff announcements will rise in the face of growing recessionary risks.”
—Eliza Winger, economist
For the full note, read here
When taken with the recent turmoil in the banking sector driven by Silicon Valley Bank and Credit Suisse Group AG, it makes for a challenging backdrop for the Federal Reserve ahead of its policy meeting next week.
The four-week moving average in initial claims, which smooths out some of the volatility in the weekly data, edged down to 196,500.
–With assistance from Jordan Yadoo and Augusta Saraiva.
(Adds economist’s comment)
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