The numbers: The number of Americans who applied for unemployment benefits last week rose by 11,000 to 239,000, indicating a small but notable increase in layoffs in a generally strong U.S. labor market.
New jobless claims increased from 228,000 in the prior week, the Labor Department said Thursday. The figures are seasonally adjusted.
The number of people applying for unemployment benefits is one of the best barometers of whether the economy is getting better or worse.
Layoffs showed a notable upturn in February that previously went undetected, according to the government’s updated formula for seasonal adjustments.
Read the government’s explanation.
Yet companies are still hiring a lot more people than they are firing in a sign of ongoing labor-market strength. The U.S. added a robust 236,000 new jobs in March.
Key details: Most of the new jobless claims were filed in California, where a flurry of layoffs at high-tech companies such as Facebook
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have taken place.
Thirty-seven of the 53 U.S. states and territories that report jobless claims showed a increase last week, while 16 posted an increase.
The number of people collecting unemployment benefits across the country, meanwhile, fell by 13,000 to 1.81 million in the week ending April 1.
These so-called continuing claims are still very low, but a gradual increase since last year suggests it’s taking longer for people who lose their jobs to find new ones.
Big picture: Wall Street is watching jobless benefits closely because it’s one of the first indicators to start blinking red when the U.S. is headed toward recession.
Right now claims are flickering green. The low but rising level of claims points to a weaker economy, but one that is still growing.
That’s evident by an exceedingly tight labor market. Many firms are struggling to find suitable workers for available work. That’s especially true in service-oriented jobs at hospitality companies whose businesses are striving.
Looking ahead: “Businesses have been extremely reticent to let go of workers that they struggled to find over the last 2 years, but it is increasingly clear that they will not be able to hold on to everyone indefinitely,” said U.S. economist Thomas Simons of Jefferies LLC.
“Our view remains that layoffs will rise less dramatically than normally might occur as companies do all they can to avoid shedding workers who have been incredibly difficult to recruit and retain,” said chief economist Joshua Shapiro of MFR Inc.
Market reaction: The Dow Jones Industrial Average
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and S&P 500
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were mixed in Thursday trades.
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