By Scott Kanowsky
Investing.com — The number of Americans filing for unemployment insurance grew by more than expected last week, according to Labor Department data on Thursday.
Seasonally adjusted initial jobless claims for the week ended on March 25 rose to 198,000, up from an unrevised level of 191,000 in the prior period. Economists had projected that the figure would climb to 196,000.
The four-week moving average for claims, which aims to account for volatility in the data set, increased by 2,000 to 198,250 – the highest mark in 10 weeks.
Meanwhile, continuing claims edged up to 1.689 million from a downwardly revised total of 1.685M in the previous week. Forecasts had placed the number at 1.697M.
Kathy Jones, chief fixed income strategist at Charles Schwab, noted in a tweet that while first-time claims moved higher, they still remain low on a historical basis. Initial claims have hovered around a fairly tight band throughout 2023 even in the face of a wave of layoffs at large technology firms.
Last week, Federal Reserve chair Jerome Powell said policymakers will keep a close eye on U.S. jobs data, in the hopes that a potential loosening in the labor market may help bring down elevated inflation. Powell suggested as well that the recent turmoil in the financial services sector may prove to be a weight on demand for labor.
At its latest meeting, the Fed bumped up borrowing costs by 25 basis points to its current range of between 4.75% to 5.00%. Economists say this tighter credit environment could lead to a slowdown in bank lending, which may in turn impact households and small businesses – both key drivers of job growth.
Elsewhere today, U.S. economic growth in the fourth quarter of 2022 was revised lower to 2.6%, according to final data from the Bureau of Economic Analysis. It marked a slowdown from an increase of 3.2% in the prior three-month period.