More good news in employment: Initial jobless claims plunge to 466,000
Economists surveyed by Bloomberg News had expected initial jobless claims to fall to 495,000. Meanwhile, the four-week moving average for initial jobless claims also dropped, falling 16,500 to 496,500. A year ago, initial jobless claims totaled 520,000 and continuing claims totaled 4.02 million.
Regarding jobless claims, economists view the four-week average as a better indicator of unemployment conditions, as it smooths out anomalies such as strikes, holidays, or other idiosyncratic events.
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 sustaining a job loss. In general, continuing claims above 3 million reflect a slack labor market and point to extended job searches of 6 to 9 months or longer.
The largest increases in initial claims for the week ending Nov. 14, the latest week for which data is available, were in: Florida, 1,313; Indiana, 607; Hawaii, 278; and North Dakota, 81. The largest decreases were in California, -7.987; Texas, -4,710; Pennsylvania, -4,321; Wisconsin, -2,716; and Ohio, -2,486.
Also, the highest insured unemployment rates for the week ending Nov. 7, the latest week for which data is available, were in: Puerto Rico, 6.2%; Oregon, 5.5%; Alaska, 5.1%; Nevada, 5.1%; Pennsylvania, 4.9%; Wisconsin, 4.9%; Arkansas, 4.7%; California, 4.7%; Michigan, 4.6%; North Carolina, 4.6%; and Washington state, 4.6%.
Keep in mind that it's only one week, but the large drop in initial jobless claims is encouraging, as is the 16,500 plunge in the four-week moving average. Economists were expecting a large drop in jobless claims to occur at some point after GDP turned positive in Q3, as other job-market data points suggest that major lay-offs are abating. Note also how the states with the highest increases in jobless claims totals (Florida, Indiana etc.) are registering lower and lower increases as the recovery progresses – that's a healthy sign. Further, investors should ignore next week's jobless claims stat, as it will contain data in a holiday-shortened week. The next meaningful checkpoint for jobs is two weeks away. If jobless claims maintain a roughly 10,000 to 15,000 per week downward trek, that would indicate that labor markets are healing – a welcome sight for investors, policy makers and prospective jobs seekers alike.