The number of claims filed by Americans for first-time unemployment benefits was higher than expected last week against a backdrop of spring break volatility and recent strike action in three states where Dutch grocer Ahold Delhaize (AD.AMS) has Stop & Shop stores.
Initial claims for jobless benefits came in at 230,000 on a seasonally-adjusted basis in the week ended April 20 from an upwardly revised reading of 193,000 the prior week, according to data filed by the Department of Labor. This was ahead of the consensus estimate of analysts polled by Econoday for 209,000 claims.
The four-week moving average — which is often viewed as a less volatile indicator of the state of initial jobless claims — was 206,000, an increase of 4,500 from the previous week’s revised average.
“This year’s late Easter, and the usual spring break volatility, was likely a big contributor to this massive three-week claims plunge and ensuing rebound, after slightly elevated levels over the winter months,” according to a note issued by Action Economics.
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“The bulk of the rebound in claims could be attributed to striking Stop and Shop workers, although there’s no indication that these strikers were actually eligible to collect benefits,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.
“In the three states, Connecticut, Rhode Island, and Massachusetts, where the hourly grocery store workers were striking, initial claims went from less than 9K to over 22K. Accounting for the seasonal adjustment, these states added about 15K to the national tally.”
Ahold Delhaize said on Tuesday it had a tentative agreement of terms with five local unions which allowed Stop & Shop’s 31,000 associates in New England to return to work. It said at that time that the strikes had affected 246 of Stop & Shop’s 415 stores and lasted 11 days, having started on April 11.
“Claims surged after dropping sharply in the previous couple of weeks, likely due to strike effects as well as seasonal adjustment issues,” said Jim O’Sullivan, chief US economist at High Frequency Economics. “The trend likely remains low.”
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