Mixed Progress for Jobless Claims

Another mixed-progress week on the employment front, as initial jobless claims fell, but by a smaller-than-expected 8,000 to 470,000 for the week ending Jan. 23, the U.S. Labor Department announced Thursday. A Bloomberg News economists' survey had expected jobless claims to total 440,000. The more-telling, four-week moving average unexpectedly rose 9,500 to 456,250.Also, continuing claims fell 57,000 to 4.6 million. A year ago, initial claims totaled 590,000, continuing claims totaled 4.67 million, and the four-week moving average was at 547,000.

States reported 5.35 million people claiming Emergency Unemployment Compensation benefits for the week ending Jan. 9, the latest week for which data is available, a decrease of 304,067 from the prior week. EUC is a federal program that provides benefits to individuals who have exhausted regular state benefits. A year ago, 1.77 million Americans were EUC claimants.

Snapshot of the Future

Regarding jobless claims, economists view the four-week average as a better indicator of unemployment conditions because it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

Economists also monitor continuing claims because that stat provides a snapshot of how long it's going to take the typical person to find comparable employment once he or she has lost a job. In general, continuing claims above 3 million reflect a slack labor market and point to extended 6- to 9-month (or longer) job searches.

The largest increases in initial jobless claims for the week ending Jan. 16, the latest week for which data is available, were in California, 43,738; Florida, 2,345; West Virginia, 1,460; Iowa, 937; and Puerto Rico, 415. The largest decreases were in: Pennsylvania, -25,819; New York, -22,173; North Carolina, -17,265; Wisconsin, -13,614; and Georgia, -12,452.

Also, the highest insured unemployment rates for the week ending Jan. 9, the latest week for which data is available, were in Alaska, 7.4%; Oregon, 6.8%; Wisconsin, 6.6%; Idaho, 6.4%; Michigan, 6.4%; Montana, 6.0%; Pennsylvania, 6.0%; Nevada, 5.7%; Connecticut, 5.5%; North Carolina, 5.5% and Washington state, 5.5%.

A Problem to Be Watched

The key takeaways from this week's report are the unexpected rise in the four-week moving average, offset by the steady, impressive decline in continuing claims. The four-week moving average rise is a problem and has to be watched.

The calculation here argues that it will resume its decline in the weeks ahead. If it doesn't, that would be a sign of a renewed rise in layoffs -- a troubling sign for labor markets and the U.S. economy.
Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.