Jobless Claims Drop More Than Expected

Encouraging news on the employment front, as new unemployment claims plunged 43,000 to 440,000 for the week ending February 6, the U.S. Labor Department announced Thursday. It was the largest decline in initial jobless claims since July 2009.

Economists surveyed by Bloomberg News had expected jobless claims to fall to 467,000.Meanwhile, the four-week moving average dipped 1,000 to 468,500, and continuing claims dropped 79,000 to 4.538 million. A year ago, initial jobless claims totaled 617,000, continuing claims totaled 4.755 million, and the four-week moving average was 601,500.

States reported 5.45 million people claiming Emergency Unemployment Compensation benefits for the week ending January 23, the latest week for which data is available, a decrease of 184,627 from the prior week. A year ago, there were 1.81 million EUC claimants.

The largest increases in initial jobless claims for the week ending January 30, the latest week for which data is available, were in: Pennsylvania, 10,495; Illinois, 3,062; North Carolina, 2,868; Georgia, 2,803; and Missouri, 2,677. The largest decreases were in: New Jersey, -1,819; Kansas, -1,600; Connecticut, -1,282; Virgina, -1,227; and Puerto Rico, -911.

The highest insured unemployment rates for the week ending January 23, the latest week for which data is available, were in: Alaska, 7.5%; Oregon, 6.7%; Idaho, 6.5%; Wisconsin, 6.4%; Puerto Rico, 6.3%; Montana, 6.2%; Pennsylvania, 6.2%; Nevada, 5.9%; Michigan, 5.8%; and Rhode Island, 5.5%

Economic Analysis

The key takeaway from this week's employment data is the large decline -- 43,000 -- in initial jobless claims. That suggests that the labor market is starting to turn. Another sign of recovery is that the increases in state-level weekly unemployment claims are getting smaller and smaller: this week, Pennsylvania was the only state to post a more than 10,000-claim increase.
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