First-time claims for unemployment insurance jumped an unexpected 28,000 to 385,000--the highest level since November--for the week ending March 30, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/040413.asp reported Thursday. Economists expected claims to rise to 350,000. Initial jobless claims for the week ending March 23 were unchanged at 357,000.[IMAGE]
The week-over-week increase in first-time claims was the strongest since mid-February, when filings rose 41,000. The weekly increase resulted from a sharp drop in seasonal adjustment factors that the Labor Department uses to account for known, recurring events that affect data.
The number of continuing claims for the week ending March 23 (reported on a one-week lag) fell 8,000 to 3,063,000. Continuing claims for the week ending March 16 were revised up to 3,071,000 from the originally reported 3,050,000.
While a setback for an otherwise improving labor picture, the claims for the week covered by this report will not be a factor in the monthly Bureau of Labor Statistics (BLS) Employment Situation release for March, scheduled for release Friday. That release will be based based on employment statistics for the week including the 12th calendar day of the month. From mid-February through mid-March, first-time unemployment insurance claims fell 25,000, and the four-week moving average fell 20,750 suggesting layoffs will not be a drag on the employment situation report.
On Wednesday, the payroll processing firm ADP reported private sector employers added 158,000 jobs in March, down sharply from 237,000 jobs added in February and from economist forecasts of 205,000 new private sector jobs.
The consensus forecast for the BLS report is an increase of 193,000 jobs in March compared with an initial report of 236,000 new payroll jobs in February, with the unemployment rate unchanged at 7.7 percent.
The four-week moving average of first-time claims increased 11,250 to 354,250. The moving average, which smooths the volatility in the weekly report, has increased for two straight weeks. Initial claims have increased for three straight weeks for the first time this year.
The four-week moving average of continuing claims fell, dropping 10,500 to 3,067,250, the lowest level since June 2008.
The continuing claims data series tracks the number of longer-term unemployed who qualify for regular state [COLUMN_BREAK]
jobless benefits and often shows large movements, depending on first-time claims 26 weeks earlier and legislative changes to state unemployment programs. It is subject to wider revisions than the number of first-time claimants.
The increase in first-time claims reverses what had been a favorable trend. Initial unemployment claims have fallen for seven of the first 12 weeks of the year, averaging just a shade over 350,000--the number most economists see as the tipping point between a strengthening and weakening jobs market. That claims reversed trajectory, coupled with the disappointing ADP report, suggests the job market has a steep hill to climb.
The unemployment rate, always a key measure of economic health, has taken on added significant since the Federal Open Market Committee said itÃ¢â‚¬â„¢s looking for a sustained unemployment rate of 6.5 percent or lower before changing interest rates or ending its other actions to stimulate the economy.
The total number of people claiming benefits in all programs for the week ending March 16 was 5,288,614, a decrease of 167,165 from the previous week. There were 7,050,710 persons claiming benefits in all programs in the comparable week in 2012. Extended Benefits were available only in Alaska during the week ending March 16.
According to the BLS, 12,032,000 persons were officially considered unemployed in February, which means that of those individuals counted as unemployed, 6.74 million were not receiving any form of government unemployment insurance, up from 6.58 million one week earlier.
The Labor Department said states reported 1,799,625 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending March 16, a decrease of 106,699 from the prior week. There were 2,815,108 persons claiming EUC in the comparable week in 2012.
States continue to borrow from the federal government to cover shortfalls in those funds which will eventually have to be repaid--unless Congress intervenes--with higher assessments on employers. Since those assessments are a percentage of payrolls, they discourage employers from adding new workers. As of March 19, 23 states had borrowed a total of $29.0 billion. One week earlier, 23 states had an aggregate $28.7 billion in outstanding loans to cover shortfalls. Five states--California, Indiana, New Jersey, New York, North Carolina and Ohio--owe more than $1 billion, which may require higher unemployment premiums or special assessments on employers in those states.
According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending March 23 were in California (+8,712), Texas (+2,736), Kansas (+1,611), Arkansas (+1,542), and Pennsylvania (+1,448), while the largest decreases were in Virginia (-1,117), Massachusetts (-804), South Carolina (-602), Puerto Rico (-529), and North Carolina (-503).
_Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, at 8:45 a.m. and again at 11:45 a.m. Eastern._