Initial unemployment claims holding steady at higher level

(Calculated Risk) After months of falling, first time claims for unemployment benefits have been on the rise for three consecutive weeks and are now running higher than at any time since the first week of January. For the week that ended April 21, seasonally adjusted initial claims hit 388,000, the Department of Labor said Thursday. That's a decrease of 1,000 from the previous week's revised figure of 389,000. But it's an increase of 2,000 from the originally reported number of 386,000. And the four-week moving average, which flattens out volatility in the weekly numbers, rose to 381,750, an increase of 6,250 from the previous week's revised average of 375,500.

Counting the federal emergency extensions that give workers in states with the highest unemployment up to 99 weeks of benefits, the total number of people making claims in all programs for the week ending April 7 was 6,677,959, a decrease of 87,160 from the previous week.

Improvements in the overall unemployment picture and reductions in the time the government will provide benefits as part of a congressional bargain over the payroll tax cut means that the number of people collecting benefits will fall sharply over the next few months. By September, the maximum duration of benefits will be 63 weeks instead of 99. For instance, some 100,000 Californians will see their benefits cease by the end of next month as the federal program cuts available benefits from 99 to 79 weeks.

The reading was the latest example of fizzling momentum in the labor market recovery. [...]

"We seem to be chasing our tail with the labor market now with seemingly reported declines in weekly numbers coming from persistently higher levels week-after-week," said Andrew Wilkinson, chief economist strategist at Miller Tabak in New York. "Today's reading also gives the uncomfortable drift upwards in initial claims the feel of a trend rather than aberration."