Weekly US jobless claims surprise to the downside again

US jobless claims continued to slip lower, contrary to economists' expectations.

According to the Department of Labor, initial unemployment claims for the week ending on 17 April dropped by 39,000 to reach 547,000.

Economists had been expecting a rebound following the prior week's sharp fall to 600,000.

The four-week moving average, which aims to smooth out the fluctuations in the dat from one week to the next, dropped by a hefty 27,750 to 651,000.

Secondary unemployment claims, which reference those not being filed for the first time and for the week ending on 10 April, dipped by 34,000 to 3.67m.

Commenting on the outlook for the US jobs market out to several quarters, Oxford Economics's Nancy Vanden Houten said: "While we may see some bumps along the way, initial claims appear to be on a clear downward path. However, we expect a full recovery in the labor market to be a gradual process.

"While we expect another 6mn jobs to be created over the rest of 2021, employment won’t return to pre-Covid levels until mid-2022 and it will take longer to achieve full employment."

On shorter time horizons, Ian Shepherdson, chief economist at Pantheon Macroeconomics, chipped in saying: "We expect further declines over the next few months as the reopening continues, while payroll growth will accelerate markedly.

"We're not expecting much improvement in April, relative to the 916K increase in March, but May and June payrolls should be much stronger."