Jobless claims remain low, but planned layoffs jump to three-year high
Initial claims for jobless benefits rose slightly last week from a 15-year low while planned layoffs surged in April to a three-year high, providing mixed signals about the health of the labor market ahead of Friday’s jobs report.
About 265,000 people applied for first-time unemployment benefits last week, up from the previous week’s 262,000, the Labor Department said Thursday.
Economists had expected claims to rise to 280,000 after hitting the lowest level since 2000 the previous week.
The four-week average, which smooths out some volatility, fell to 279,500 last week. That was the lowest level since May 2000.
Despite that upbeat data, other labor market indicators signal trouble.
Layoffs announced by U.S. companies jumped 68% in April to 61,582, career counseling firm Challenger, Gray & Christmas Inc. said Thursday. That was the highest monthly level since May 2012.
The effects of lower oil prices were the cause for the increase and have pushed announced job cuts for the first four months of the year up to 201,796, a 25% increase from the same period last year, the firm said.
This year’s total is the most for the first four months of the year since 2010, and is consistent with recent weak job growth.
About a third of the layoffs announced last month were directly attributable to lower oil prices, Challenger Gray said.
“The jobs that are most vulnerable are those in the field — engineers, oil rig operators, drill operators, refinery operators, etc.,” said John A. Challenger, the company’s chief executive.
The new data came after payroll firm Automatic Data Processing Inc. reported Wednesday that private sector job growth slowed in April for the second-straight month. The 169,000 net new jobs added were the fewest in more than a year.
The ADP report led some economists to consider downgrading their forecasts for Friday’s federal report on overall April job growth — private and public sectors.
Economists estimate, on average, that the Labor Department’s report Friday will show that the economy added 220,000 net new jobs in April, up sharply from 126,000 positions created the previous month.
The unemployment rate is expected to tick down to 5.4%.
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