Reports from the Labor Department on Thursday showed that first time filings for jobless benefits rose more than expected, marking the third consecutive week of increases, indicating that the labor market slowed at the end of the first quarter.
The federal agency’s report showed initial jobless claims, a gauge of new layoffs, increased by 28,000 to a seasonally adjusted 385,000 during the week ended March 30, representing a four-month high for the figure. Economists were expecting claims to drop to 350,000 from an unrevised 357,000 the week prior.
A Labor Department spokesman said that the Easter holiday and spring break vacations make it difficult to make seasonal adjustments. This could have an impact on upcoming revisions.
The four-week moving average, a less-volatile measure of jobless trends, increased 11,250 from and unrevised 343,000 the week earlier. It was a four-week high for the closely watched on-month average.
The total number of people claiming benefits in all programs, which are reported at a three-week lag, was 5,288,614 for the week ending March 16. This was a decrease of 167,165 from the previous week. Compared to the same week in 2012, the latest figure was lower by 1.76 million.
ADP’s Wednesday report on hiring in the private sector showed that 158,000 new jobs were added in March, following an upwardly revised 237,000 number in February. January’s total was revised down to 177,000 from an original 215,000 estimate. ADP’s estimates are subject to stark revisions, but it will take a huge (and unlikely) upward revision reverse the idea that hiring grinded to a much slower pace in the final month of the first quarter. March’s figure was the smallest since October and well below economist expectations.
If there was a silver lining in the ADP report, it was that hiring was distributed evenly among all industries, with the exception of construction which added zero jobs for March after averaging 29,000 new hires from December through February. The March drop was attributed to slowness after increased efforts to rebuild after the destruction of Hurricane Sandy last year.
The two reports may have set precedent for the upcoming Labor Department non-farm payroll report on Friday that contains the latest unemployment rate. Economists are expecting the unemployment rate to be flat in March from its 7.7 percent reading in February.
Investors were a little giddy first thing this morning after the Bank of Japan unveiled an aggressive plan of monetary easing, including a large government bond-buying program. Futures pointed north early, but following the report on first time jobless claims, a slow slide back towards the red has happened. About 1 PM Eastern, the Dow (-7), S&P 500 (-1) and Nasdaq (–7) were all lower on the day.