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Stubborn Unemployment Claims Suggest Slowdown in Job Creation

The number of Americans claiming unemployment benefits for the first time fell only slightly last week, dampening hopes of a pick-up in job creation in April after March's slowdown.

Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 386,000, the Labor Department said on Thursday. The prior week's data was revised to show 8,000 more applications received than previously reported.

The four-week moving average for new claims, considered a better measure of labor market trends, rose 5,500 to 374,750.

Economists polled by Reuters had forecast claims falling to 370,000 last week.

"The number suggests that improvement is slowing down," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

Stock index futures pared gains on the report, while Treasury debt prices rose and the dollar pared gains against the yen.

The claims data covered the week for April's nonfarm payrolls survey. The four-week average of new applications rose marginally between the March and April survey periods, suggesting not much change in labor market conditions.

Employers added 120,000 new jobs to their payrolls in March, the least since October, after averaging 246,000 jobs per month over the prior three months.

Most economists have viewed the pull-back in job growth as payback after the weather-induced gains in the previous months.

"Some of the improvement in labor market earlier this year was probably due to the unseasonably mild weather," said Jeremy Lawson, a senior economist at BNP Paribas in New York. "This data is consistent with the softer payrolls number in March."

A Labor Department official said there was nothing unusual in the state-level data.

The number of people still receiving benefits under regular state programs after an initial week of aid rose 26,000 to 3.30 million in the week ended April 7.

The number of Americans on emergency unemployment benefits fell 19,419 to 2.78 million in the week ended March 31, the latest week for which data is available.

A total of 6.77 million people were claiming unemployment benefits during that period under all programs, down 187,807 from the prior week.