First-time claims for unemployment benefits unexpectedly decreased in the week ended March 14th, according to a report released by the Labor Department on Thursday, although the report also showed a continued increase in continuing claims.
The report showed that initial jobless claims fell to 646,000 from the previous week's revised figure of 658,000. Economists had been expecting claims to edge up to 655,000 from the 654,000 originally reported for the previous month.
With the decrease, initial claims moved back away from the twenty-six year high of 670,000 that was set in the week ended February 21st. Nonetheless, claims remain at historically high levels.
At the same time, the report showed that the less volatile four-week moving average rose to 654,750 from the previous week's revised average of 651,000. The increase lifted the moving average to its highest level since October of 1982.
The Labor Department also said that continuing claims in the week ended March 7th rose to 5.473 million from the preceding week's revised level of 5.288 million. With the increase, continuing claims rose to another new record high.
"The data speaks for itself and the story remains the same, more weakness, "said Peter Boockvar, equity strategist at Miller Tabak. "The hope though is that since this is a lagging indicator, the economy will start to improve before this data does, but who knows when."
In an effort to help revive the economy, the Federal Reserve announced on Wednesday that it would spend up to $1.2 trillion in order to lower rates on mortgages and other consumer debt.
The Fed said that it plans to purchase up to additional $750 billion of agency mortgage-backed securities and to increase its purchases of agency debt this year by up to $100 billion.
Additionally, the central bank said that it has decided to purchase up to $300 billion of longer-term Treasury securities over the next six months in order to help improve conditions in private credit markets.
While the Fed noted that the near-term economic outlook is weak, it expects that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.
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