(Bloomberg) -- Applications for US unemployment benefits ticked up for the first time in three weeks, suggesting some softening in what’s still a robust labor market in which employers are hesitant to let people go.

Initial unemployment claims increased by 7,000 to 198,000 in the week ended March 25, Labor Department data showed Thursday. The median forecast of economists was for 196,000 applications. 

Continuing claims, which include people who have received unemployment benefits for a week or more and are a good indicator of how hard it is for people to find work after losing their job, was little changed around 1.69 million in the week ended March 18.

Despite the increase, the report showcases a labor market that’s shown continued strength after a year’s worth of interest-rate hikes by the Federal Reserve. Unemployment is historically low, there are nearly two job openings for every American who wants one and job creation remains robust.

Still, economists expect jobless claims to eventually reflect layoff announcements that have spanned across the tech, finance and media sectors. It’s not yet clear how the banking crisis might affect unemployment filings, but the economy will likely shown some signs of strain in the coming weeks and months.

Read more: A Credit Crunch Is the Last Thing the Strained US Economy Needs

What Bloomberg Economics Says...

“Continued low levels of initial jobless claims point to persistent labor shortages in the economy. We expect conditions to ease ahead, with layoffs set to rise as job cuts announced earlier in the year become effective with a lag.”

— Eliza Winger, economist

To read the full note, click here

The four-week moving average in initial claims, which smooths out week-to-week volatility, edged up to 198,250, the highest in two months.

On an unadjusted basis, claims rose by nearly 11,000 to 223,913, with Michigan, Massachusetts and California posting the biggest increases.

The data precede next week’s employment report, which is expected to show another strong month of hiring in March.

A separate report Thursday showed US corporate profits declined in the fourth quarter by the most in two years, while gross domestic income posted the largest drop since the start of the pandemic.

--With assistance from Augusta Saraiva and Jordan Yadoo.

(Adds Bloomberg Economics comment and corporate profits data)

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