Initial Jobless Claims Fall 28,000 to Lowest Level in Over a Year

initial-jobless-claims-fall-by-28-000-to-lowest-level-in-over-a-yearThe country continues to make progress on the employment front: Initial jobless claims plunged 28,000 to 452,000 for the week ending Dec. 19, the U.S. Labor Department announced Thursday. That was considerably better than had been forecast. The consensus of economists surveyed by Bloomberg News had been for jobless claims to fall by 10,000 to 470,000. Initial claims haven't been lower since the week of Sept. 6, 2008, when they were 447,000.Meanwhile, continuing claims also plummeted, falling 127,000 to 5.07 million. In addition, the four-week moving average for initial jobless claims fell 2,750 to 465,250. A year ago, initial jobless claims totaled 564,000 and continuing claims totaled 4.33 million.

%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays and 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 six to nine months or longer.

The largest increases in initial jobless claims for the week ending Dec. 12, the latest week for which data is available, were in: Puerto Rico, 1,260; Louisiana, 1,123; Nebraska, 941; Maine, 728; and the District of Columbia, 696. The largest decreases were in: North Carolina, -14,374; Pennsylvania, -14,302; New York, -13,432; Georgia, -11,142; and Wisconsin, -10,650.

Also, the highest insured unemployment rates for the week ending December 5, the latest week for which data is available, were in: Puerto Rico, 6.4%; Oregon, 5.9%; Pennsylvania, 5.6%; Wisconsin, 5.6%; Alaska, 5.4%; Washington, 5.2%; Idaho, 5.1%; Nevada, 5.1%; California, 4.9%; Michigan, 4.9%; and North Carolina, 4.9%.

Economic Analysis

This was a good week for jobless claims. If initial jobless claims keep falling at a pace of 10,000 to 15,000 per week, that would be evidence that hiring is accelerating.

Also significant -- the downward trend in continuing claims persists. While it's true that some of the continuing claims decline reflects Americans who have exhausted their unemployment benefits -- and therefore don't count as being unemployed -- some of it represents jobs found, an encouraging sign for the U.S. economy. Job growth is essential for a sustained U.S. economic expansion.
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