The number of people filing for first time unemployment benefits is trending lower, following drastic declines during the holiday-shortened weeks, according to the US Department of Labor. For the week ending January 2nd, initial jobless claims were 467,000, a decrease of 24,000 from the previous reading of 491,000. This was a surprise, as economists were expecting 540,000 new claims for the week. Initial claims running consistently atop the 350,000 mark would signal some weakening in the labor market. Claims above 400,000 are seen by many as a signal of recession.
Having witnessed extremely volatile measurements in the past few weeks, it is wise to consider the four-week moving average of initial claims, which smooths out one-time factors such as bad weather or holidays. The four-week average continued its trek downwards, falling by 27,000 to 525,750. It is still up 53% in the last year, though.
Analysts doubt that recent drops in initial claims are a good sign, and said the declines are likely due to a technical issue with seasonally adjusting the data around the holidays, analysts said. – MarketWatch.
It is pretty obvious now that businesses are laying more employees off, and at a faster pace, and that the unemployed are having a tougher time looking for a replacement job. A year ago, initial claims were at 330,000. And initial claims are expected to rise again in mid-January, according to the Labor Department and many analysts.
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