Initial unemployment claims moved back toward trend last week subduing concerns that the March payrolls had heralded a deterioration the labor market.
First time filing for jobless benefits rose 4,000 to 352,000 according to the Labor Department in Washington D.C., as the four week moving average rose to 361, 250 from 358,500. The prior week was revised 2,000 higher to 348,000. Economists had forecast 350,000 claims.
Claims in the last two weeks of March had climbed sharply, averaging 372,500 more than 31,000 higher than the average of the previous four weeks. When the March job numbers at 88,000 were combined with the weak ISM manufacturing and service reports and retail sales, particularly the employment and new orders components of ISM, evidence seemed to be assembling that the labor economy had taken a substantial dive in late March and into April.
The mean reversion in claims probably means that although the March job figures undermine the notion that the economy is beginning to accelerate, the status quo unemployment insurance numbers just as probably indicate that the economy is not suddenly worse. The current level of claims is normally associated with about 125,000- 150,000 monthly job gains.
The Conference Board said its index of leading economic indicators for March fell to -0.1%, well below the 0.1% forecast and the 0.5% score the previous month. It was the first decline in seven months.
The Philadelphia Fed reported that its business activity index fell to 1.3 in April less than half the 3.0 forecast and below the 2.0 reading in March. Most component indices were lower: new orders index sank to -1.0 from 0.5 in March, the number of employees fell to -6.80 from 2.70, the weakest for this index since last November, prices paid dropped to 3.10 from 8.50 and prices received slid to -7.50 from -0.80.
Currencies were largely unaffected by the reports with the euro trading in a 50 point range against the dollar and the yen moving just under 70.
The Dow had lost 57 points or 0.39%, the Nasdaq 27, 0.84% and the S&P 500 7, 0.44% at 12:37 pm ET.
Chief Market Strategist