The numbers: The number of Americans who applied for unemployment benefits last week slipped to a three-week low of 191,000, signaling little erosion in a strong U.S. labor market even as the economy faced fresh strains.
New U.S. applications for benefits fell by 1,000 from 192,000 in the prior week, the government said Thursday. .
The number of people applying for jobless benefits is one of the best barometers of whether the economy is getting better or worse. New unemployment applications remain near historically low levels.
Economists polled by The Wall Street Journal had forecast new claims to total 198,000 in the seven days ended March 18. The numbers are seasonally adjusted.
Key details: Twenty-eight of the 53 U.S. states and territories that report jobless claims showed a decrease last week. Twenty-five posted an increase.
Most of the changes were small except in Indiana.
One potential red flag: The number of raw or actual claims — before seasonal adjustments — was much higher last week compared to the same week a year earlier. But so far there’s little sign of a trend.
“Even the tens of thousands of recent [high-tech] layoffs have almost completely been absorbed by a powerful labor market that has plenty of expansion left in it,” contended Robert Frick, chief corporate economist at Navy Federal Credit Union.
The number of people collecting unemployment benefits across the country, meanwhile, rose by 14,000 to 1.69 million in the week ended March 11. That number is reported with a one-week lag.
These continuing claims are still low, but a gradual increase since last year suggests it’s taking longer for people who lose their jobs to find new ones.
Big picture: Jobless benefit claims are one of the first indicators to emit danger signals when the U.S. is headed toward recession. It’s still not flashing a red-light, or even a yellow one, as the economy comes under more duress.
The Federal Reserve, for instance, just raised interest rates to a nearly 16-year high. And the failure of Silicon Valley Bank has put more stress on the U.S. financial system.
Both of these actions could constrain the economy in the months ahead, curb hiring and potentially boost a low unemployment rate. If so, watch the trend in new jobless claims.
Looking ahead: “Most companies are either still hiring or are holding onto their employees and seeking other ways to cut costs,” said chief economist Joshua Shapiro of MFR Inc.
“This is consistent with our view that layoffs will rise less dramatically than normally might occur as companies do all they can to avoid shedding workers who have been incredibly difficult to recruit and retain.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open higher in Thursday trades. Stocks have been under pressure since the failure of SVB earlier this month.
