Setback as US jobless claims on the rise

Initial claims for state unemployment benefits increased 28,000 to a seasonally adjusted 385,000, the highest level since November, the Labor Department said yesterday.

It was the third straight week of gains in claims and confounded economists’ expectations for a drop to 350,000.

Coming on the heels of data on Wednesday showing private employers added the fewest jobs in five months in March, the report implied some weakening in job growth after hiring accelerated in February.

The four-week moving average for new claims, a better measure of labor market trends, rose 11,250 to 354,250.

“It does look like recently we’ve seen some stalling in job creation, or at least a stalling in the lowering of claims,” said Tim Ghriskey, chief investment officer at Solaris Group in Bedford Hills, New York.

US stock futures cut gains after the data, while Treasury debt prices rose.

While the claims report has no bearing on today’s nonfarm payrolls data for March as it falls outside the survey period, it hinted at some weakness in hiring.

Employers are expected to have added 200,000 jobs to their payrolls last month, according to a Reuters survey, slowing from February’s brisk 236,000. The jobless rate is seen unchanged at 7.7 per cent.

New filings for jobless benefits rose 45,000 in March.