Jobless claims rise to 3-week high of 198,000, but layoffs are still extremely low

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The numbers: The number of Americans who applied for unemployment benefits last week rose to a three-week high of 198,000, but that number is still extremely low and shows little sign of rapidly accelerating layoffs.

New U.S. applications for benefits increased by 7,000 from 191,000 in the prior week, the government said Thursday.

The number of people applying for unemployment benefits is one of the best barometers of whether the economy is getting better or worse.

New unemployment filings remain near historically low levels. They’ve totaled less than 200,000 in 10 of the last 11 weeks, an unusually long stretch.

Economists polled by the Wall Street Journal had forecast new claims to total 195,000 in the seven days ending March 25. The numbers are seasonally adjusted.

Key details: Thirty of the 53 U.S. states and territories that report jobless claims showed a decrease last week, while 23 posted an increase.

One potential red flag: The number of raw or actual claims — before seasonal adjustments — was notably higher last week compared with the same week a year earlier. That’s been the case for the last several weeks.

The number of people collecting unemployment benefits across the country, meanwhile, edged up by 4,000 to 1.69 million in the week ending March 18.

These continuing claims are still very low, but a gradual increase since last year suggests it’s taking longer for people who lose their jobs to find new ones.

Big picture: The low level of jobless claims indicates that the economy is still in expansion mode. Many companies are doing brisk business, especially in the large service side of the economy, and they are still hiring.

Wall Street is watching jobless benefits closely, however. That is one of the first indicators to emit danger signals when the U.S. is headed toward recession.

Looking ahead: “Although hiring in the U.S. economy remains strong, there appears to be the potential for more slack in hiring trends set for the spring and summer months,” said senior economist adviser Stuart Hoffman of PNC Financial Services.

“With talk of deteriorating economic conditions and in the wake of the recent bank failures, businesses may turn more cautious in their hiring practices,” he said.

Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open higher in Thursday trades.

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