US unemployment claims edge higher

The number of Americans filing new claims for jobless benefits edged higher last week, but a trend reading dropped to its lowest in five years and pointed to ongoing healing in the labour market.

Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 336,000, the Labour Department said today.

Economists polled by Reuters had expected 342,000 first-time applications last week.

The four-week moving average for new claims, a measure of labour market trends, fell 7,500 to 339,750, the lowest level since February 2008, which could bode well for job growth in March.

Last week's claims data covered the survey period for the government's monthly tally of nonfarm jobs. The four-week average of new claims fell 6 per cent relative to the survey week in February, when nonfarm payrolls increased by 236,000.

Still, while layoffs have ebbed over recent months, companies have been cautious about ramping up hiring and the Federal Reserve appears concerned that government cutbacks could dampen progress made in the labour market.

Yesterday the Federal Reserve pressed forward with its aggressive policy stimulus, pointing to still-high unemployment, fiscal headwinds out of Washington and risks from abroad.

The action came despite recent data showing the economy gathering strength. Retail sales have been stronger than expected, manufacturing output has picked up and employment growth has quickened, with the jobless rate dropping to 7.7 per cent last month from 7.9 per cent in January.

The central bank said it will continue buying $85 billion (€66 billion) in bonds per month, pledging to keep up its asset purchases until it sees a substantial improvement in the labour market outlook.

Last week, the number of people still receiving benefits under regular state programs after an initial week of aid rose 5,000 to 3.053 million in the week ended March 9th.

Reuters