US weekly jobless claims increase marginally as labour market remains stable

[WASHINGTON] The number of Americans filing claims for unemployment benefits increased slightly last week, pointing to continued labour market stability in April, though economic uncertainty and higher prices stemming from the war with Iran pose downside risks.

Initial claims for state unemployment benefits rose 6,000 to a seasonally adjusted 214,000 for the week ended April 18, the Labor Department said on Thursday (Apr 23). Economists polled by Reuters had forecast 210,000 claims for the latest week.

There are no signs yet of widespread layoffs from the US-Israel war with Iran, which has disrupted shipping in the Strait of Hormuz and boosted the price of oil and other commodities, including fertilisers, petrochemicals and aluminium.

Teheran effectively ​closed the strait after the conflict started ​on February 28. Economists worry a prolonged conflict could undermine an already fragile labour market.

President Donald Trump’s sweeping import tariffs and immigration crackdown were blamed for the labour market’s stumbles last year. Trump on Tuesday indefinitely extended the ceasefire with Iran, though a US Navy blockade of Iranian ports remained in effect.

The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of April’s employment report. Payrolls increased by 178,000 jobs in March after declining by 133,000 in February. Payrolls have dropped in six of the last 15 months.

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The labour market has remained anchored by low layoffs, even as employers show little appetite for expanding headcount. The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 12,000 to a seasonally adjusted 1.821 million during the week ended April 11, the claims report showed.

While the so-called continuing claims have retreated from last year’s highs, that could partly be due to workers exhausting benefits, which are capped at 26 weeks in most states. The data also excludes some unemployed young people with little or no work history, a group that is facing a difficult job market. REUTERS