First-time claims for unemployment insurance in the US fell last week while revisions to the previous data were larger than normal, raising questions about whether recent payroll gains that have pushed unemployment to a three-year low may be shortlived.
Initial claims for jobless benefits fell by 2,000 to 386,000 in the week to April 14, according to the US labour department. Analysts surveyed by Bloomberg had forecast 365,000 new claims.
Thursday’s report illustrates the vulnerability of closely watched indicators to revisions, which can cloud a clear picture of the economy. The figures for the week ending April 7 were revised up by 8,000 to 388,000 – the highest level since January. After an upward revision to 370,000 from an initial estimate of 360,000, the numbers for the week before were revised back down to 362,000, Thursday’s release showed.
The four-week moving average, which smooths out seasonal quirks, rose to 374,750, an increase of 5,500 from the previous week’s again upwardly revised average of 369,250.
David Semmens, senior US economist at Standard Chartered, said: “What is worrying is that the leap higher after the Easter holiday has only seen a mild edging down. The four-week moving average . . . [is] the highest since January. This will be especially disappointing given that this week corresponds to the survey week for non-farm payrolls.”
Employers added 120,000 employees to their payrolls in March, the least since October, after averaging 246,000 new jobs a month over the previous three months.
Jonathan Basile, director of economics at Credit Suisse, said jobless claims were “a highly reliable indicator for the economy and unemployment picture. There really are concerns about job creation. When you have more than one week of such unusual data it will worry people.
“If the trend does continue in this way and lay-offs pick up, this may also bring back the notion that the Federal Reserve has to do more. While is has been a great run for jobless claims and the unemployment rate in recent months, there are now more fears about a hiccup in the US economy and labour market.”
The number of people receiving benefits under regular state programmes after an initial week of aid rose 26,000 to 3.3m in the week ended April 7.
The number of Americans receiving emergency unemployment benefits fell 19,419 to 2.78m in the week to March 31, the latest period for which data were available. A total of 6.77m people claimed unemployment benefits during that period under all programmes, down 187,807 from the previous week.
Separately, existing home sales fell in March to a worse than expected level, according to the National Association of Realtors. Total completed transactions of single-family homes, town houses, condominiums and co-ops fell 2.6 per cent to a seasonally adjusted annual rate of 4.48m last month from an upwardly revised 4.60m in February.
Although below expectations of 4.62m, the numbers are 5.2 per cent above the 4.26m-unit pace in March 2011.
“The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases,” said Lawrence Yun, NAR chief economist.
“Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year. With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year,” he added.
Total housing inventory at the end of March declined 1.3 per cent to 2.37m existing homes available for sale, which represents a 6.3-month supply to clear the inventory at the current sales pace, equal to the month before. Listed inventory is 21.8 per cent less than the same month a year ago, below the record of 4.04m in July 2007.
The change in the mix of sales bumped up the median sales price to $163,800, up 4.6 per cent month on month, after a 1.3 per cent rise in February.
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