Initial jobless claims rise, but continuing claims plunge
A Bloomberg News economists survey had expected initial jobless claims to total 460,000. The four-week moving average for initial jobless claims fell 7,750 to 473,750. A year ago, initial jobless claims totaled 552,000 and continuing claims totaled 4.35 million.
Economists view the four-week average for jobless claims as a better indicator of unemployment conditions because it smooths out anomalies for 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 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.
The largest increases in initial jobless claims for the week ending Nov. 28, the latest week for which data are available, were in Wisconsin, 8,067; Kansas, 3,825; Missouri, 3,307; Iowa, 2,789; and Indiana, 2,162. The largest decreases were in California, -28,672; Texas, -9,519; North Carolina, -8,873; Florida, -7,214; and Illinois, -6,610.
Also, the highest insured unemployment rates for the week ending Nov. 21, the latest week for which data are available, were in Puerto Rico, 6.1%; Oregon, 5.6%; Alaska, 5.5%; Nevada, 5.1%; Wisconsin, 4.9%; Washington, 4.8%; Michigan, 4.7%; Pennsylvania, 4.7%; Arkansas, 4.5%; Idaho, 4.5%; and North Carolina, 4.5%.
This week, the key labor stat is the continuing claims plunge of 303,000. True, some of the large, recent declines in this measure reflect Americans who have exhausted their continuing claims benefits -- and therefore don't count as being unemployed -- but some of it represents jobs found. If continuing claims keep declining at a 200,000 to 250,000 clip per week, that would be a constructive development for the economy.
Further, we're still a few months away from an outright decline in the U.S. unemployment rate, but we're getting close to some monthly job gains. Typically, there's a one-quarter lag between GDP growth and monthly job gains. Hence, given the 2.8% third-quarter U.S. GDP rise, we could see job gains as early as January or February 2010.