New claims for unemployment benefits retreated slightly last week, but a more accurate barometer of labor market trends rose to its highest level in five years, the government said Thursday.
The number of newly laid-off workers filing for benefits totaled 385,000 last week, a decline of 10,000 from the week before, which was a five-year high, the Labor Department said. Last week’s figure, however, was 123,000 more than a year earlier.
The closely watched four-week moving average, which irons out weekly fluctuations, rose for the third consecutive week, to 382,250 from 381,500 for the previous week. This was its highest level since 388,500 in the week of April 13, 1996.
Labor Department analysts said Federal Reserve officials, as is customary, were given an advance look at the weekly jobless claims figures on Wednesday morning, 24 hours ahead of the release of the statistics to the public. On Wednesday, Fed policymakers issued a surprise cut in short-term interest rates, sparking a major stock market rally.
The rising layoffs have already pushed unemployment up slightly in March to 4.3 percent, compared with the 30-year low of 3.9 percent reached late last year.
Analysts have begun to worry, with more companies reporting sales declines and earnings problems, that the slowdown could worsen into a full-blown recession unless the Fed’s efforts to boost confidence begin to take hold.
Fed Vice Chairman Roger Ferguson said Thursday the central bank had ample room to lower interest rates further and said it was an “open question” as to how low rates might need to go to revive the flagging economy.
A day after the Fed’s surprise 50 basis-point cut in the fed funds rate, to 4.5 percent, Ferguson said “there’s plenty of room” for more rate moves.
“We will continue to be vigilant to ensure that the economy does not tip into recession,” he said after a speech to the National Economists Club and the Society of Government Economists.
“What interest rates will be associated with a return to healthy growth in spending remains an open question,” he said.
