US initial jobless claims drop a little less than expected

The number of Americans filing for unemployment benefits fell a little less than expected last week, according to data from the Labor Department.

US initial jobless claims were down 9,000 from the previous week's unrevised level to 233,000. Economists had been expecting a slightly bigger drop to 230,000.

Meanwhile, the four-week moving average rose by 1,750 to 230,000. The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

The Labor Department said claims-taking procedures in Puerto Rico and in the Virgin Islands have still not returned tonormal.

Continuing claims - i.e. the number of people already collecting unemployment benefits, rose to 1.871m from a revised 1.818m the week before. The four-week moving average was 1.850m, down 1,500 from the previous week's revised average and marking the lowest level for this average since January 1974.

Pantheon Macroeconomics said: "The changing date of the Easter holiday from year-to-year makes the seasonal adjustment process tricky from late March through late April, so further volatility in headline claims over the next few weeks can't be ruled out. But the underlying trend likely isn't changing much, and it probably remains below 230K, a record low when adjusted for population growth over time.

"With labour so hard to find, the bar for letting people go is very high, so layoffs will remain a close to their current levels for some time yet. We'd be surprised to see any further sustained decline in claims, though; they are probably now close to their incompressible minimum level."