The Labor Department reported Thursday that for the first time unemployment insurance claims rose more-than-expected last week despite other signs of a recovery in the labor market.

Total claims for the first time for the week ended April 3 came to 744,000, well above expectations for 694,000 economists surveyed by the Dow Jones. The total represents an increase of 16,000 from the previous week’s 728,000, revised upward. The four-week moving average rose to 723,750.

This news comes a week after there was a sign of more robust recovery in the labor market, such as the non-farm payrolls in March By 916,000 While the unemployment rate has decreased to 6%.

This was the biggest job gain since August, although unemployment remains well above the pre-pandemic low of 3.5%.

Ongoing claims provided some good news on the business front, with the total dropping from 16,000 to 3.73 million. This is the lowest level of ongoing claims since March 21, 2020, after the Covid pandemic struck directly and companies set up mass layoffs in conjunction with the economic shutdown. Continuing claims continue a week after the headline of the weekly number.

A year ago, that total was only 3.44 million, but it rose shortly thereafter due to mass layoffs in late March and early April.

California and New York accounted for most of the increase in jobs, with increases each of 38,963 and 15,714, according to unadjusted data. These increases were offset to some extent by decreases of 13,944 in Alabama and 10,502 in Ohio.

Economists said a backlog of orders could be one of the factors driving the number of claims up, while spikes in Covid cases for some states could also lead to a spike in filings.

Markets did not react much to the data, as stock futures and government bond yields mixed.

Despite recent progress, Fed officials say more progress is needed on the jobs front before they consider a policy change.

Minutes from The last meeting of the Federal Open Market CommitteeReleased on Wednesday, it indicated a better outlook for the economy despite the continuing need for an easy policy.

Fed Governor Lyle Brainard told CNBC on Wednesday that the economic outlook has “dramatically improved” but that there are still about 9 million fewer workers than there were before the pandemic. Central bank officials said they not only want to see full employment but also comprehensive gains across lines of income, race and gender.

“In that sense, we have some distance to go before achieving the results,” Brainard said.

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