Jobless Claims Fall Marginally as Recovery Sputters Along
The nation received some qualified good news on the labor front today as initial jobless claims fell 23,000 to 452,000 for the latest reporting week. However, the prior week's total was revised upward by 13,000 to 475,000.
The consensus of economists surveyed by Bloomberg had been that initial jobless claims would dip to 455,000.
Also, the four-week moving average fell 4,250 to 458,000. Economists consider the moving average to be the more useful statistic because it smooths out bumps in the data caused by holidays, strikes, weather-related layoffs and other anomalies.
Meanwhile, continuing claims decreased 9,000 to 4.41 million. Some of this decline comes from people who have exhausted their benefits, but some of it is also due to people finding work.
The initial jobless claims rate will have to drop below 400,000 during the next two quarters before economists and investors will have confidence that commercial activity is increasing at a pace that would prompt most companies to curtail layoffs and resume hiring.
Substantial One-Year Progress
A year ago, initial jobless claims totaled 535,000, the four-week moving average was at 533,250, and continuing claims totaled 5.89 million.
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States also reported 4.04 million persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending Oct. 2, the latest period for which data is available, an increase of 152,112 from the prior week. A year ago, there were 3.43 million persons claiming EUC benefits.
Also, the pattern of lower highs for the states posting weekly increases in jobless claims paused last week, after about a month of steady declines. There were five large-increase states, up from two last week: New York, up 8,558; North Carolina, 8,470; California, 7,929; Florida, 7,229; and Pennsylvania, 5,682.
The highest insured unemployment rates for the week ending Oct. 2, the latest for which data is available, were in Puerto Rico, 6.4%; Alaska, 4.4%: Nevada, 4.0%; California, 3.9%; New Jersey, 3.9%; Oregon, 3.9%; and Pennsylvania, 3.8%.
This week's jobless claims report falls into the category of "a glass half-full." Initial jobless claims did decline, but the large revised increase in the prior week's figure erased more than half of the improvement. Also, as noted, state-level claims popped higher, but one week's numbers aren't cause enough to declare a break in the downward trend in that key metric. The bottom line: Jobless claims are trending in the right direction -- downward -- an indication that layoffs are subsiding. They're just not falling fast enough yet to suggest the economic recovery is gaining steam.
