US jobless claims rise more than forecast, but level remains low

[WASHINGTON] Applications for US state unemployment insurance rose by more than forecast last week, likely a blip in what's otherwise a tight and recovering labor market.

Initial unemployment claims increased by 14,000 to 202,000 in the week ended March 26, Labor Department data showed Thursday. The median estimate called for 196,000 applications in a Bloomberg survey of economists.

Continuing claims for state benefits fell to 1.3 million in the week ended March 19.

The rise in applications likely reflects the choppiness of the data week to week, as employers are desperately trying to retain workers and attract new ones. Claims - which hit the lowest level since 1969 in the prior period - have been trending downward for most of the year alongside declining Covid-19 cases, and the combination of dwindling savings and decades-high inflation is raising the financial incentive to work.

The data precedes the government's Friday employment report, which is currently forecast to show the US added about half a million jobs in March and the unemployment rate fell to 3.7 per cent. A separate report Wednesday showed US companies added 455,000 jobs this month, according to ADP Research Institute.

Another report on Thursday showed US inflation-adjusted consumer spending declined in February, suggesting the fastest pace of price increases in four decades is tempering demand.

On an unadjusted basis, initial claims increased to 195,460 last week. California, Michigan and Ohio were states registering the biggest increases in unadjusted claims. BLOOMBERG