Wall Street is in the green again on Thursday following a report from the Labor Department showing the first time filings for jobless benefits in the week ended April 6 dropped after surging more than expected the week prior.
The Labor Department said that the number of initial jobless claims for the latest week fell to a seasonally adjusted 346,000, a decrease of 42,000 from an upwardly revised 388,000 claims the week earlier. The agency had originally estimated 385,000 claims for the week ended March 30. The latest estimate is the lowest number in three weeks.
The latest figure was well below economist predictions of a drop to 364,000 claims.
The four-week moving average, typically regarded as a better barometer of the labor markets because is smooths weekly volatility, registered 358,000, up by 3,000 from the upwardly revised 355,000 figure (from 354,250) the week earlier. Although it should be expected that the four-week average will begin to decline in coming weeks, the latest level is the highest in two months.
The advanced estimate of the number of continuing claims, or those people that are already collecting jobless benefits, declined by 12,000 to a seasonally adjusted 3.08 million for the week ended March 30. The four-week average was nearly identical to that estimate, up by 5,250 from the revised prior week’s average of 3.074 million.
The total number of benefit recipients in all programs for the week ended March 23 was 5.28 million, a decrease of 10,573 from the week prior. Compared to the same week in 2012, there were 1.68 million less claims in 2013.
The largest increase in claims for the week ending March 30 came from Pennsylvania with 3,015 claims, followed by New Jersey (+2,409) and Illinois (+2,149). Texas posted the largest decline with 3,489 fewer claims, followed by California (-2,661) and North Carolina (-1,601).
The decrease in new claims across the country is welcome news after a jump the week prior and a separate report from the Labor Department that showed the U.S. only created 88,000 new jobs during the month of March. The latest minutes from the meeting three weeks ago by the Federal Open Market Committee were scoured through by investors on Wednesday for signals of the timeframe that the central bank’s monetary stimulus programs would continue. Data collected early in the year showed the U.S. building momentum in the jobs market, sparking conversation that the quantitative easing efforts may end sooner than later, but the lame month of March provided contradictive information about labor trends.
The latest information is again supportive of the longer term trends that show the jobs situation is getting continually better.
Wall Street is embracing the information as another catalyst to hit new highs. The Dow has broken through 14,800 and is up about 70 points heading into the lunch break. The S&P 500 has hit new record levels, advancing about 20 points and drawing ever-closer to 1,600. Meanwhile the Nasdaq is ahead by about 60 points and looking to print above 3,300 for the first time since November 2000.
With the Labor Department reporting that the U.S. only created a paltry 88,000 new jobs in March, investors will be paying close attention to the weekly reports on new claims as a barometer of what may happen with the unemployment rate in April.