Though the number of workers seeking unemployment insurance rose slightly for the week ending April 13 (up 4,000), the U.S. Labor Department reports that the applications report still suggests solid hiring and that March’s unemployment spike was temporary. While the seasonally adjusted number of benefits recipients sat at 352,000 last week, the four-week average rose a mere 2,750 to 361,250. After reaching a four month high three weeks ago, layoffs have fallen sharply after a slew of seasonal Easter staff reductions.
Job growth took a big hit in March as employers added 88,000 jobs, down from the average 220,000 jobs added per month between November and February. Considering the current level of unemployment benefits claims activity, economists are projecting about 190,000 jobs will be added for the month of April. Over 5.1 million people received unemployment benefits in the week ended March 30, 125,000 fewer than the prior week.
Though the unemployment rate fell to 7.6 percent in March, the drop was the result of people dropping out of the job market instead of becoming employed. Predictions for the economy for Q1 2013 are optimistic with the government expecting to measure a market increase in growth over Q4 2012. Most economists are currently forecasting an annual rate of growth of 3 percent between January and March 2013, a significant jump from the 0.4 percent growth measure in the final quarter of 2012.
However, analysts also expect growth to decelerate during Q2 2013 as the March 1 government spending cuts affect the hiring behavior of businesses in April and beyond.