New Jobless Claims Suffer a Thanksgiving Setback

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Weekly initial jobless claimsInitial jobless claims rose 26,000 to 436,000 in the latest week, but U.S. Labor Department officials caution that the report contains a seasonal adjustment associated with the Thanksgiving Day holiday. A Bloomberg survey had expected initial jobless claims to total 425,000. The Labor Department revised the previous week's total 3,000 higher to 410,000.

However, the four-week moving average declined 5,750 to 431,000, which is a more encouraging sign. Economists naturally emphasize that measure precisely because it smooths out anomalies due to holidays like Thanksgiving Day and other one-time events. Staying with the see-saw numbers in this weekly report, continuing claims rose 53,000 to 4.27 million.

Jobless claims are still well above the 400,000 mark generally accepted as a level that would indicate commercial activity is increasing at a pace that prompts most companies to curtail layoffs and resume hiring.

Moreover, even with the week's rise to 436,000, new jobless claims are still at a two-year low. A year ago, they totaled 475,000, the four-week moving average was at 492,000 and continuing claims totaled 5.52 million.

More Claims for Emergency Benefits

The Labor Department's jobless claims report also reported 3.94 million people claimed Emergency Unemployment Compensation (EUC) benefits for the week ending Nov. 13, the latest week for which data are available, a increase of 142,874 from the prior week. A year ago, 3.78 million people claimed EUC benefits.

Also, the pattern of fewer states posting large increases in jobless claims paused last week. Five states showed large increases (up from one last week): California, 4,442; Pennsylvania, 4,124; Kentucky, 4,097; Illinois, 3,448; and Texas, 2,999.

The highest insured unemployment rates for the week ending Nov. 20, the latest week for which data are available, were in Alaska, 6.3%; Puerto Rico, 5.3%; Oregon, 4.6%; Pennsylvania, 4.2%; and California, 4.1%.

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Separately, the Monster (MWW) Employment Index fell four points to 134 in November from October -- its fourth decline in five months. Although the index, which measures online job demand based on ads placed online, grew on a year-over-year basis for the 10th straight month, November's 13% year-over-year growth rate is lower than the 21% rate recorded this summer.

"The slight month-to-month decline in the Monster Employment Index could be attributed partly to seasonal trends typically witnessed at this time of the year," Jesse Harriott, senior vice president and chief knowledge officer at Monster Worldwide, said in a statement. "The outlook however continues to be one of modest recovery with job availability generally higher over the year across most sectors as we approach 2011."

With this week's initial claims data likely skewed by the Thanksgiving holiday, investors shouldn't conclude that the downtrend has slowed, let alone stopped.
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