The number of American workers filing for unemployment benefits, in early April, fell below 200,000 for the first time in fifty years. And, of course, economists are now saying this is the latest sign that the labor market is strong despite the far slower—but still growing—US economy.
Initial jobless claims, of course, give us an estimate about layoffs and this data fell 8,000, to reset at a seasonally-adjusted 196,000 in the first week of April. Some economists had forecast the reading would be more than 210,000; during the final week of March, 204,000 folks applied for their unemployed benefits. And data confirms that initial jobless claims have declined four weeks in a row.
Obviously, this is quite a significant difference. All in all, April’s sharp decline brought the month’s four-week average of new unemployment insurance applications down to 207,000. This data alone is impressive, sure, but when coupled with another government report that shows rebounding job creation and things are really starting to look up.
The four-week moving average of initial jobless claims, listed above, is considered a better—more reliable—measure of the American labor market. This is because the metric sorts out the week-to-week volatility that could otherwise look for more dramatic than it really is.
It should be noted that this 196,000 jobs added in March were nonfarm payroll numbers. More importantly, it nearly doubles the approximately 100,000 jobs that should be added, per month, in order to keep pace with the growing working-age population.
Adding 196,000 jobs in March is particularly special because February only saw an addition of 33,000, according to data from the United States Department of Labor. Other numbers definitely indicate strong momentum, with 180,000 jobs added in the first quarter of the year, pressing unemployment down to 3.8 percent and a labor force participation rate hovering around 63 percent. Officials at the Federal Reserve had earlier projected that the unemployment rate should drop to 3.7 percent by the end of the year.
Monitoring the labor market is crucial because the workforce is really the main support for the whole of the American economy, which has lost some momentum in the first few months of the year, thanks to the $1.5 trillion tax cut package fading. In addition, the US-China trade war continues to complicate commerce at a time when global demand is softening.