Weekly US jobless claims register unexpected rise

Jobless claims in the US rose unexpectedly during the previous week.

According to the US Department of Labor, in seasonally adjusted terms the number of initial unemployment claims rose by 21,000 over the week ending on 4 March to reach 211,000.

Economists polled by Dow Jones Newswires had forecast 195,000.

Meanwhile, the four-week moving average, which aims to smooth out the volatility in the data from one week to the next, increased by 4,000 to reach 197,000.

Secondary unemployment claims, which are those not being filed for the first time and referencing the week ending on 25 February jumped by 69,000 to reach 1.718,000.

The prior week's reading for secondary claims was marked down by 6,000 to 1,655,000.

Commenting on the latest claims figures, Ian Shepherdson, chief economist at Pantheon Macroeconomics, conceded that it was the biggest rise since late November, but added that some of the rise was likely the result of "severe" weather in the upper Midwest and California - which would not last.

"The bigger picture here is that claims remain very low and range-bound. That said, the latest data from Challenger, released earlier today, show that the number of layoffs announced in January and February was the highest since 2009, and nearly double the pre-Covid trend. This will take time to filter through to the claims data, but we expect to see a clear and sustained increase by the spring."

Micheal Pearce, Lead US economist at Oxford Economics, said the rise in initial claims was the first sign of weakness in the claims data in 2023.

But he went on to say that: "Even after factoring in the latest increase, jobless claims are exceptionally low by historical standards, underscoring just how tight labor market conditions still are.

"It's possible this is an early sign that the spike in announced layoffs is beginning to filter through to some job losses but, as we argued in previous research, not all announced layoffs translate into job cuts, and workers are quickly finding new jobs."