Thursday’s U.S. initial claims report is a nasty omen for tomorrow’s U.S. employment report. Coming in much weaker than expected, U.S. initial jobless claims jumped to 445,000 last week.

“While this is not only the highest level for claims since April 2002, the number of claims for the previous week was also revised higher as well,” say RBC Financial. “Meanwhile, continuing claims increased to 3.6 million.”

RBC says that the U.S. Labor Department has suggested that these numbers could have been adversely affected by severe weather disruptions in some western states. It also allows that it’s possible that some seasonal adjustment problems relating to the Easter holidays could be affecting the data.

“Nevertheless, not matter how you slice it, the initial claims numbers are simply indicative of a deteriorating U.S. labour market,” it says. “Certainly, it is quite possible that the March rise also reflects the effects of the Iraqi war on business decisions. But add to that relatively weak demand and poor pricing power and U.S. companies seem to have no choice but to also continue slashing jobs in order to keep their bottom lines intact.”

The recent weekly claims numbers together with other leading labour market indicators clearly set up downside possibilities for tomorrow’s U.S. employment report, RBC concludes. “We expect a loss of 50,000 jobs with the unemployment rate increasing by a tick to 5.9%.”

in Canada, RBC says that it expects the labour market’s momentum to continue into March, albeit at a more moderate pace than the big gains seen in February, with 20,000 jobs expected. “We also expect the unemployment rate to drop a notch to 7.3% from 7.4% the month before.”