The number of people filing for first time unemployment benefits was higher in the latest week, following massive spikes during the first part of the new year. This comes after witnessing tempered declines during the holiday-shortened weeks, according to the US Department of Labor. For the week ending January 24th, initial jobless claims stood at 588,000, an increase of 3,000 from the previous downwardly-revised reading of 585,000. This was a small surprise, as economists were expecting 575,000 new claims for the week. The reading is only 1,000 new claims from a 26-year high, set last month.
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 upwards, rising by 24,250 to 542,500.
Continuing jobless claims rose by 159,000 in the week ended Jan. 17 to a seasonally adjusted 4.78 million, the most since the government’s records begin in 1967. – MarketWatch.
The underlying trend in claims is still rising, and could reach a peak of 750,000, according to Ian Shepherdson, chief U.S. economist with High Frequency Economics.
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 366,000.
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