Easter volatility lifts weekly jobless claims

By Lucia Mutikani

WASHINGTON (BestGrowthStock) – The number of workers filing for unemployment benefits unexpectedly shot higher last week but did not alter the view that labor markets are recovering as the jump reflected Easter holiday volatility.

Analysts said news on Thursday of a record jump in monthly same-store sales in March was further evidence the economic recovery was starting to broaden out.

“It does reflect some of the other signs we are seeing that the economy is beginning to pick up a little bit of steam,” said Joseph Brusuelas, chief economist at Brusuelas Analytics in Stamford, Connecticut. “The overall recovery may be self-sustained but there are still risks out there.”

Initial claims for state unemployment benefits rose 18,000 to a seasonally adjusted 460,000, the Labor Department said on Thursday, well above market expectations for 435,000.

A Labor Department official said the spike reflected difficulties in seasonally adjusting the data around a moving holiday like Easter. A March 31 holiday in California and the end of the first quarter also contributed to the rise.

Analysts expect unusual shifts in the claims data to continue for the next two weeks or so.

“Looking past this volatility, claims are trending lower and that’s indicative of a notable decline in firings. The question that remains is how much strength is there in hiring; this is where there is still uncertainty,” said Michelle Meyer, an economist at Barclays Capital in New York.

Sales at stores open at least a year rose 9.1 percent in March, the largest monthly jump since Thomson Reuters began tracking results in 2000 and well ahead of Wall Street estimates of a 6.3 percent increase. More than 90 percent of 28 retailers tracked beat expectations.


The upbeat retail sales report offset lingering worries over Greece’s ability to tackle its debt crisis, helping U.S. stocks (Read more about the stock market today. ) reverse earlier losses to end higher.

The dollar dipped against the euro after European Central Bank President Jean-Claude Trichet said Greece was not in danger of defaulting. U.S. government bond prices gave up earlier gains and trended lower in late trade.

Jobs are the weakest link in the economic revival that started in the second half of 2009 following the worst recession since the 1930s. But there are heartening signs labor markets are in the early stages of recovery.

A government report last Friday showed employers, led by the private sector, added 162,000 jobs in March — the largest monthly gain in three years.

The Federal Reserve still views the economic recovery as modest, and on Thursday Vice Chairman Donald Kohn and Governor Daniel Tarullo reiterated the U.S. central bank’s commitment to ultra-low interest rates. In a speech in San Francisco, Kohn described the labor market as “extremely weak.”

“We cannot provide a precise timetable for when short-term interest rates will begin to return to normal because that depends on the evolution of actual and projected activity and inflation. The most likely scenario is a gradual pickup in economic activity,” said Kohn.

Although the four-week average of new jobless claims rose last week, it remained close to 450,000 for a third week.

In another hopeful sign for the labor market, the number of people still receiving benefits after an initial week of aid fell to its lowest since December 2008, the report showed.

That took the insured unemployment rate, which measures the percentage of the insured labor force that is jobless, down to 3.5 percent, the lowest since January 2009, from 3.6 percent in the prior week.

While companies have resumed hiring, the pace remains too slow to make a huge impact on the 8.2 million people who have lost their jobs since the recession struck in December 2007.

The Labor Department report showed more than 10 million Americans are receiving some form of unemployment benefit.

“This suggests that while private sector hiring may have turned a corner, it has not done so with enough force to materially eat into the vast numbers of people still unemployed,” said Anna Piretti, an economist at BNP Paribas in New York.

Government data last week showed a record 44.1 percent of the 15 million unemployed people in March had been out of work for 27 weeks or more.

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(Additional reporting by Emily Kaiser in Washington, Jim Christie in San Francisco and Phil Wahba in New York; Editing by Andrea Ricci and James Dalgleish)

Easter volatility lifts weekly jobless claims