The number of Americans filing applications for unemployment benefits fell more than expected last week, pointing to still strong labor market conditions, though the pace of job growth has slowed after last year’s robust gains.
Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 221,000 for the week ended March 16, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported.
The Labor Department said no states were estimated. Economists polled by Reuters had forecast claims falling to 225,000 in the latest week. Claims have been drifting in the middle of their 200,000-253,000 range this year.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 1,000 to 225,000 last week.
The Federal Reserve held interest rates steady on Wednesday and its policymakers abandoned projections for further rate increases this year, noting that “the labor market remains strong but growth of economic activity has slowed from its solid rate in the fourth quarter.”
The unemployment rate is 3.8 percent and annual wage growth in February was the strongest since 2009.
The claims data covered the survey week for the nonfarm payrolls portion of March’s employment. The four-week average of claims fell 11,000 between the February and March survey periods, suggesting a pickup in job growth after hiring almost stalled last month.
Nonfarm payrolls increased by only 20,000 jobs in February, the fewest since September 2017. The slowdown followed big gains in December and January.
Average job growth has moderated to about 165,500 per month from 223,250 per month in 2018, reflecting a shortage of workers and softening economic growth as the stimulus from a $1.5 trillion tax cut package fades.
A trade war between the United States and China, as well as slowing global growth and uncertainty over Britain’s exit from the European Union, are also hurting domestic economic activity.
Thursday’s claims report showed the number of people receiving benefits after an initial week of aid decreased 27,000 to 1.75 million for the week ended March 9.
The four-week moving average of the so-called continuing claims rose 6,000 to 1.77 million.