Initial claims for unemployment insurance in the US fell by 4,000 to 323,000 in the week ending May 4, 2012, and beat market expectations for a 335,000 reading. The decline in filings in the latest week, which followed a 15,000 decline to an upwardly revised 327,000 (was 324,000) in the previous week, brought initial claims to its lowest level since January 2008.
The four-week moving average of initial claims, which better controls for weekly volatility, continued to trend downward, falling to 336,800 from 343,000 the previous week. Continuing claims for the week ending April 27, 2013 declined by 27,000 to 3,005,000.
The decline in initial claims brought the four-week moving average down to its lowest level since November 2007. The continued improvement in filings in recent weeks was reflected in fairly encouraging labour market data that saw payroll employment rise 165,000 in April while the unemployment rate fell to 7.5% in the month. With that said, we continue to expect that the pace of employment growth will moderate in the near term from the 208,000 average increase seen during the six months ended April 2013, as the effect of government expenditure cuts enacted March 1 continues to weigh on hiring.
RBC