U.S. initial claims dropped a larger-than-expected 42,000 to 346,000
The dropback in claims suggests that the increase the previous week likely reflected difficulties seasonally adjusting the data around Easter rather than underlying weakness. With that said, even with the drop the latest week, the four-week moving average still inched up to 358,000 from 355,000 the previous week, marking the third consecutive weekly increase in the measure. Continuing claims, for the week ending March 30th, dipped 12,000 to 3,079,000.
The drop in initial claims in the latest week suggests that difficulties seasonally adjusting the data around Easter, rather than underlying weakness, was likely responsible for the bulk of the outsized increase the prior week. With that said, a third consecutive weekly rise in the 4-week moving average may still be reflecting some impact from sizeable government spending cuts implemented March 1. Experts express the opinion these cuts could have a dampening impact on economic growth and labour markets in the near-term.
