US jobless claims back off from lowest level since 1969; increase by 21,000

The number of Americans filing for unemployment benefits rebounded last week from a more than 48-year low, but the trend continued to point to robust labour market conditions.

That was underscored by other data on Thursday showing job cuts announced by US-based employers fell 20 per cent in February. Federal Reserve officials consider the labour market to be near or a little beyond full employment. The tight jobs market is seen boosting wage growth and spurring inflation.

Initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 231,000 for the week ended March 3, the Labour Department said. Claims dropped to 210,000 in the prior week, which was the lowest level since December 1969.

Economists polled by Reuters had forecast claims rising to 220,000 in the latest week. It was the 157th straight week that claims remained below the 300,000 threshold, which is associated with a strong labour market. That is the longest such stretch since 1970, when the labour market was much smaller.

The claims data has no impact on February's employment report, which is scheduled for release on Friday, as it falls outside the survey period. Claims mostly declined in February, leading economists to expect another month of strong job growth.

According to a Reuters survey of economists, the Labour Department's closely followed employment report will likely show that nonfarm payrolls increased by 200,000 jobs last month, matching January's gains. The unemployment rate is forecast falling one-tenth of a percentage point to 4.0 per cent, which would be the lowest level since December 2000.

The dollar held at slightly lower levels against a basket of currencies after the data. Prices for US Treasuries were little moved. US stock index futures were mostly flat.

The Labour Department said claims for Maine and Colorado were estimated last week. It also said claims-taking procedures in Puerto Rico and the Virgin Islands had still not returned to normal, months after the territories were slammed by Hurricanes Irma and Maria.

The four-week moving average of initial claims, viewed as a better measure of labour market trends as it irons out week-to-week volatility, rose 2,000 to 222,500 last week.

The claims report also showed the number of people receiving benefits after an initial week of aid decreased 64,000 to 1.87 million in the week ended Feb. 24. The four-week moving average of the so-called continuing claims fell 14,250 to 1.91 million.

In a separate report, global outplacement consultancy Challenger, Gray & Christmas said U.S.-based employers announced 35,369 job cuts in February, down 20 per cent from January.

So far this year, employers have announced 80,022 layoffs, the lowest number of planned job cuts between January and February since 1995.

"Announced job cuts have been below 50,000 a month for the last 22 months. That's the longest streak in our tracking," said John Challenger, the company's chief executive officer.