The number of people filing for first time unemployment benefits eased slightly in the latest week, temporarily halting a sharp upward trend that began during the first part of this new year. This comes after witnessing abrupt declines during the holiday-shortened weeks, according to the US Department of Labor. For the week ending February 7th, initial jobless claims came in at 623,000, a decrease of 8,000 from the previous upwardly-revised reading of 631,000. This was a mild surprise, as economists were expecting 610,000 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.

Initial jobless claims are coming off their highest levels since the recession of 1982, touching a 26-year high.

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 24,000 to 607,500. It is now at the highest level since November 1982.

For the week ending Jan. 31, the number of Americans receiving state jobless benefits rose 11,000 to a record 4.81 million. The four-week moving average of these continuing claims also reached a record, rising 73,750 to 4.75 million.

The continuing claims result is “incredibly worrisome,” wrote Dan Greenhaus of the equity strategy group at Miller Tabak. – 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 339,000.

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