The U.S. Department of Labor reported on Thursday morning that initial claims for unemployment insurance increased by 28,000 for the week ended March 30. Claims totaled a seasonally-adjusted 385,000, a 7.8 percent increase from last week’s unrevised figure of 357,000 and about 10 percent higher than expectations. This is the highest level of claims since late November.
Released an hour before the opening bell in New York, the news weighed heavily on pre-market trading and marginalized futures gains. However, equities traders seemed to brush away the bad news bears in early trading and markets were posting modest gains by mid morning.
The DoL report showed that the four-week moving average, a less-volatile indicator, increased 3.2 percent to 354,250, and suggests that employment growth slowed in the last two weeks of March. The insured unemployment rate remained unchanged at 2.4 percent.
The data follows a disappointing labor market report released yesterday. ADP’s National Employment Report showed that total non-farm private sector payrolls increased just 158,000 for the month, far below expectations for an increase of 205,000, and 17 percent shy of the average rate of growth for the first quarter.
Tomorrow, the government will release the employment situation report for March. Economists are largely expecting the headline U-3 unemployment rate to remain unchanged at 7.7 percent with an addition of about 193,000 non-farm payrolls. This compares against 236,000 non-farm payroll additions in February. The average workweek is also expected to remain unchanged at 34.5 hours.
Also released on Thursday morning, a report from Challenger, Gray & Christmas showed that employers announced 49,255 layoffs in March, an 11 percent decrease month to much, but a 30 percent increase year over year. Most of the layoffs were in the retail industry.