The latest data from the U.S. Labor Department shows that new applications for unemployment insurance rose far above expectations, indicating a cooling in the country's labor market. The seasonally-adjusted initial jobless claims for the week ended on April 1 were 228,000, up from 198,000, which was a preliminary level that was revised upwardly to 246,000 in the preceding week. This marks a significant deviation from the 200,000 claims that economists had forecast.
The Labor Department also revised the previous reading far higher following a broad change in estimation models that reflected the pandemic's impact on the data set. This adjustment led to larger-than-usual revisions, the department said.
The four-week moving average, which aims to account for volatility in the weekly numbers, was 237,750, down from a greatly upwardly revised number of 242,000. Meanwhile, continuing claims climbed to 1.823 million from a revised mark of 1.817 million in the prior week. This suggests that it may be becoming more difficult for recently unemployed workers to find new jobs, which could indicate a worsening labor market.
This latest data follows a steady stream of labor market readings released this week, including the March job openings survey and ADP's private hiring report, both of which suggested that the U.S. labor market is beginning to slow, albeit from historically tight levels. As a result, some economists have predicted that the Federal Reserve could moderate its recent series of interest rate hikes going forward.
While senior Fed officials have moved to persuade markets that ongoing hikes in borrowing costs are still a possibility, the yield on the U.S. 2-Year note, which closely tracks rate expectations, has now slipped for a fifth straight day.
