Unemployment Filings Drive Job Market Downhill
Unemployment filings led the job market to a murky direction as it jumped above the key 400,000 level for the third consecutive week, according to a government report on Thursday, April 28, 2011.
It was the highest level that unemployment filings reached for the last three months and it surprised economists because it was beyond their expectation of 390,000.
Wells Fargo Economic Analyst Tim Quinlan thinks that the unpredicted increase is a major disappointment because it is another move in the wrong direction for the job market.
The four-week moving average of initial filings also rose to 408, 500, which is 9,250 above the threshold from the previous week. The eight-week moving average, a better gauge for longer-term trends, also reached more than 400,000.
Quinlan added that the increase is more than a misstep for the job market. For him, it is a signal that the robust recent job growth is bound to lose momentum.
In March, the employment rate rose for the fourth consecutive month to 8.8 percent, the highest since March 2009, as the economy gained more than 216,000 jobs.
On the other hand, the number of ongoing claims decreased by 68,000 to 3,709,000 for the week ended April 26, 2011 and its four-week moving average fell by 22,750 to 3,697,750.
For Quinlan, the downward trend is not all good news because the figure could have been distorted by the expiration of benefits for Americans who have been jobless for a long period and are no longer eligible for unemployment insurance.
For the job market to go back in good shape, 150,000 to 200,000 jobs are required to be added monthly and unemployment claims are required to be consistently below 400,000.