The number of applications for unemployment benefits in America dropped to a 15-year low last week, a sharp decline possibly coupled with seasonal quirks & low layoff rates.
The number of American people applying for unemployment benefits dropped to a 15 year low last week. This sharp decline could be a result of seasonal quirks but reflects low layoff rates in the US economy.
During the period from 19 – 25 April, initial jobless claims dropped to z seasonally adjusted low of 262, 000 from a previous week’s revised numbers of 292, 000, reported on Thursday by the Labor Department. These numbers beat Wall Street expectations.
The 4-week new claims average fell a smaller 1250 to 283, 750. Interestingly, sharp fluctuation in volatile weekly job reports are smoothed out by the monthly averages and are often considered a more accurate prediction of labor market numbers and trends.
A layoff proxy represented by the drop in jobless claims this week is a positive and very welcomed sign; however, should be handled with caution as the report is typically very jumpy around late March through until end of April. This is due to challenges associated with seasonal adjustments to account for Easter holidays and spring break occurring weeks apart from year to year.
Despite seasonal fluctuation, the level of new claims has still remained under the key 300,000 mark for eight consecutive weeks which indicates that layoffs are still very low, but hiring seems to have slowed down since the end of 2014. Although the labor market is not showing rapid improvements, companies are continuing to hire steadily.
Wall Street is set to receive the latest diagnosis regarding hiring trends for April’s employment report next week. MarketWatch polled some economists who predicted that the economy likely added 245, 000 jobs, increasing sharply from the 126, 000 preliminary rise in March.
In the week that ended on the 18th April, American people who receive continuing claims, also known as weekly unemployment checks, decreased by 74, 000 to 2.25 million, marking a 15 year low.
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