After reaching a twenty-six year high in the previous week, initial jobless claims gave back some ground in the week ended April 4th, according to a report released by the Labor Department on Thursday, with claims falling a little more than expected.
The report showed that jobless claims fell to 654,000 from the previous week's revised figure of 674,000. Economists had expected jobless claims to edge down to 660,000 from the 669,000 originally reported for the previous week.
The upwardly revised claims data for the previous week still marked the highest level since claims came in at 695,000 in the week ended October 2, 1982.
While the report also showed that the less volatile four-week moving average edged down to 657,250 from the previous week's revised average of 658,000, it remains at an elevated level.
Additionally, the Labor Department said that continuing claims in the week ended March 28th rose to another record high of 5.840 million from the preceding week's revised level of 5,745 million.
Despite the decrease in initial claims, the report continues to paint a generally bleak picture of the labor market, which has seen considerable weakness in recent months.
Last Friday, a report from the Labor Department showed that employment continued to fall sharply in March, although the decrease in payroll employment came roughly in line with economist estimates.
The report showed that non-farm payroll employment fell by 663,000 jobs in March following an unrevised decrease of 651,000 jobs in February. The drop in jobs came roughly in line with economists' expectations of a decrease of 658,000 levels.
With the continued decrease in jobs, the unemployment rate rose to 8.5 percent in March from 8.1 percent in February, in line with expectations. The increase lifted the unemployment rate to its highest level since November of 1983.
While the employment data is generally seen as a lagging indicator of the strength of the economy, the continued decrease in jobs can still negatively impact consumer confidence.
Subsequently, with people worried about losing their jobs less likely to make discretionary purchases, the perception of a weak labor market can still hurt consumer spending, which accounts for about two-thirds of economic activity.
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