Initial jobless and continuing claims fall in October's final week
A Bloomberg News survey had expected initial jobless claims to fall to 523,000 this week. The four-week moving average, which economists view as a better indicator because it smooths out anomalies for strikes, holidays or other idiosyncratic events, decreased 3,000 to 523,750. A year ago, initial jobless claims totaled 488,000 and continuing claims totaled 3.86 million.
Economists also monitor the continuing claims stat because it provides a snapshot of how long it's going to take the typical person to find comparable employment after losing a job. In general, continuing claims above 3 million reflect a slack labor market and point to extended, six- to nine-month (or longer), job searches.
In response to these conditions, the U.S. Senate on Wednesday voted unanimously to offer up to 20 more weeks of unemployment benefits to those who have been out of work for an extended time, The New York Times reported. The measure ups the maximum weekly benefit claim to 99 weeks, or nearly two years, which is the longest period allowed in some states. As early as Thursday, the U.S. House is likely to approve the Senate measure, which differs from an earlier House version, so that President Obama can sign it into law.
The largest increases in initial claims for the week ending Oct. 24, the latest week for which data are available, were in California, 14,394; North Carolina, 3,190; Oregon, 3,131; Georgia, 2,549; and New York, 2,287. The largest decreases were in Indiana, -2,346; Puerto Rico, -1,479; Iowa -969; Nevada, -605; and Florida, -545.
Also, the highest insured unemployment rates for the week ending Oct. 17, the latest week for which data is available, were in Puerto Rico, 6.4 percent; Nevada, 5.4 percent; Oregon, 5.4 percent; California, 4.9 percent; Pennsylvania, 4.9 percent; Arkansas, 4.8 percent; Wisconsin, 4.8 percent; Michigan, 4.7 percent; Alaska, 4.6 percent; North Carolina, 4.6 percent; and South Carolina, 4.6 percent
Economic Analysis: Today's reports shows more progress regarding the U.S. labor market. Investors should note how the totals for the states with the largest increases in jobless claims (except California) are getting consistently smaller. Historically, that's been an indicator of an improving employment situation and that layoffs are coming to an end. Of course, 512,000 initial jobless claims are still high, but if they repeatedly fall 15,000-20,000 per week, that would signal a decent-size economic recovery.