By Casey Quinlan
After a few weeks of steady drops, jobless claims reached a two-month peak last week, signaling this week’s claims may be higher than in the past few weeks. The news of sharply rising jobless claims last week combined with a disappointing March unemployment report are indications that the jobs sector is improving at a slower pace than forecasted.
The four-week moving average for initial jobless claims was 368,000, over 4,000 claims higher than the previous week’s revised average. The previous week was revised to show 10,000 more claims were submitted than initially reported.
Though seasonal issues such as the Easter holiday may have influenced the number, the rise was nonetheless worrying to economists when it was released alongside the March jobs report, which added only 120,000 jobs.
Some economists say external shocks such as the uncertainty about rising gas prices, the possible overturning of the individual health care mandate and continued instability in Europe may be responsible for cooling down hiring.
Jesse Rothstein, associate professor of public Policy and economics at Berkeley, said he expects sharper rises in jobless claims this week, closer to the April 15 number, than the steady drops seen in February and March, but he did not predict a specific number.
“I am not too optimistic that they will fall off quickly in the next few months and I am worried that they will rise again as the economy is hit with external negative shocks and policymakers seem to have lost the will to support the recovery,” Rothstein said.
Janet Currie, professor of economics at Princeton University’s Woodrow Wilson School of Public and International Affairs, is slightly more optimistic, but said she does not believe jobless claims will drop substantially in the next initial jobless claims report or in future weeks. Currie said she expects jobless claims to drop this week but not at the same levels seen in late February and early March.
“Recovery from a deep recession tends to be slow and that will likely be true in this case as well,” Currie said.
Whether this week’s jobless claims dip only slightly below 380,000 or rise to 385,000 due to world events and rising oil prices, the four-week average remains safely below last year’s claims which held well over 400,000. If jobless claims remain relatively stable and an April unemployment report shows healthier job growth, the recovery may regain its strength, albeit slowly.