The Labor Department released its weekly report on unemployment Thursday, April 3—and the news was not cheery.
Indeed, the number of U.S. workers applying for unemployment benefits soared by 38,000 last week. That’s the highest reading since September 2005, reinforcing fears that the U.S. economy has stalled.
A Labor Department official said there were no special factors to explain the increase in initial claims during the week ended March 29, but he said seasonal adjustments to the data owing to the early timing of the Easter public holiday this year may have influenced the reading.
Economists polled by Reuters had expected initial jobless claims to increase to 370,000 in the week ending March 29, compared with 369,000 the prior week.
But the numbers were far worse than that. The new data shows 407,000 initial unemployment claims were filed last week.
What’s more, the four-week moving average of new claims—thought to be a more reliable guide to underlying labor market trends—also increased sharply. It rose to 374,500, which was the highest reading since October 2005.
Analysts fear a housing slump and credit crunch may have tipped the U.S. economy into recession and are scrutinizing the labor market for evidence of slackening jobs that could chill consumer spending.
Today’s report should give those analysts a pretty clear view of which way things are heading.