Americans filed fewer claims for unemployment benefits in the latest week, but the dip was less than expected and dimmed hopes that the labor market was back on track to healthier conditions.
The Labor Department said Thursday that seasonally-adjusted claims dropped by 2,000 to 386,000 in the week ended April 14. The four-week moving average, considered a more accurate gauge of the labor market's health, rose by 5,500 to 374,750.
Economists polled by Reuters had forecast claims falling to 370,000 last week.
"I am disturbed by this number. It is a clean number with little to skew it as we had last week and so we are obviously moving in the wrong direction here. The Fed will not hang its hat on any one piece of data, but put this data together with the weak payrolls report last month and it is sending a disturbing signal about the labor market," said Tom Porcelli, chief U.S. economist for RBC Capital Markets.
The claims data covered the week for April's nonfarm payrolls survey. The four-week average of new applications rose marginally between the March and April survey periods, suggesting not much change in labor market conditions.
Employers added 120,000 new jobs to their payrolls in March, the least since October, after averaging 246,000 jobs per month over the prior three months. Most economists have viewed the pull-back in job growth as payback after the weather-induced gains in the previous months.
A Labor Department official said there was nothing unusual in the state-level data.
The number of people still receiving benefits under regular state programs after an initial week of aid rose 26,000 to 3.30 million in the week ended April 7.
The number of Americans on emergency unemployment benefits fell 19,419 to 2.78 million in the week ended March 31, the latest week for which data is available.
A total of 6.77 million people were claiming unemployment benefits during that period under all programs, down 187,807 from the prior week.
Reuters contributed to this report.