Initial Jobless Claims Surge on Year-End Filings
Meanwhile, continuing claims declined 18,000 to 5.99 million -- their lowest level in a year. A year ago, initial jobless claims totaled 575,000, continuing claims totaled 4.58 million, and the four-week moving average was at 526,500.
Emergency Unemployment Shows Big Increase
Also, states reported 5.65 million persons claiming Emergency Unemployment Compensation benefits for the week ending January 2, the latest week for which data is available, an increase of 652,364 from the prior week. A year ago, there were 2.09 million EUC claimants.
Economists view the four-week average as a better indicator of unemployment conditions, as 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 once he/she has sustained a job loss. In general, continuing claims above 3 million reflect a slack labor market, and point to extended 6-9 month (or longer) job searches.
The largest increases in initial jobless claims for the week ending January 9, the latest week for which data is available, were in: California, 16,160; Texas, 15,892; Florida, 12,939; Pennsylvania, 12,562 and Georgia, 10,822. The largest decreases were in: Oregon, -5,784; Iowa, -4,450; Kentucky, -3,467; Michigan, -1,242; and Massachusetts, -1,085.
Also, the highest insured unemployment rates for the week ending January 2, the latest week for which data is available, were in: Oregon, 7.3%; Wisconsin, 7.2%; Alaska, 7.1%; Pennsylvania, 6.9%; Idaho, 6.8%; Michigan, 6.2%; North Carolina, 6.1%; Montana, 5.0%; Puerto Rico, 6.0%; and Washington state, 6.0%.
The key take-a-way for this week's report is the year-end holiday filings that boosted claims above what they would be in a typical week. That's a classic example of why economists and labor statisticians emphasize the four-week moving average, which smooths-out such anomalies.
Bottom Line: While unemployment claims jumped, the bigger picture -- the 4-week moving average and continuing claims data -- shows a labor market that is gradually healing.