WASHINGTON – The number of Americans applying for unemployment benefits rose last week to the highest level since February 2015, more sobering news for the labour market after a disappointing April jobs report.
The Labor Department reported Thursday that applications for jobless aid rose by 20,000 to a seasonally adjusted 294,000. The four-week average, a less volatile measure, rose by 10,250 to 268,250, highest in nearly three months.
Jobless claims are a proxy for layoffs. Despite last week’s increase, they remain low. They have come in below 300,000 for 62 straight weeks, longest streak since 1973.
Unemployment claims dropped in April to the lowest level since November 1973 before heading back up.
“Today’s jobless claims report was a surprise, and not a positive one,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “Jobless claims have moved sharply higher in recent weeks, reinforcing concerns that labour market conditions have softened in response to the slowdown in the economy in recent months.”
The Labor Department reported last week that employers added just 160,000 jobs in April, fewest since September. The labour market had been shrugging off weak economic growth: The economy expanded at a lacklustre 0.5 per cent annual pace from January through March after growing just 1.4 per cent the last three months of 2015.
The economy has been weighed down by weakness overseas and a strong dollar that hurts exporters by making American products more expensive in foreign markets.
Since the Great Recession ended seven years ago, growth has usually been weak in the first quarter, only to pick up in the April-June quarter. Many economists expect a similar pattern this year, and forecast growth of 2 per cent from April through June.