The number of Americans filing for first-time jobless benefits declined more than expected last week, bringing the number of claims back down near five-year lows after inflated figures were reported over the last month because of the partial government shutdown and computer glitches in California caused a delay in processing claims.
In its weekly report, the Department of Labor showed that initial jobless claims, a rough gauge of weekly layoffs, dropped by 21,000 to a seasonally adjusted 323,000 for the week ended November 16. Meanwhile, the week prior’s claims were revised upward from an original estimate of 339,000 to 344,000. Economists were expecting claims to decline only to 335,000.
The four-week moving average, a less volatile measure of the labor market, fell to 338,500 from a revised 345,250 the week earlier. The one-month average is starting to slide back down now that the figures that were temporarily inflated are becoming a thing of the past. In general, economists view claims under 350,000 as a sign of modest growth in the jobs market.
No sates or territories were estimated and there was nothing unordinary in the report, according to the Labor Department.
Continuing claims, or those people already receiving state benefits, rose to 2.876 million from 2.81 million in the week ended November 9. Continuing claims are reported at a one-week lag to initial claims.
Total claims, which account for all the people receiving benefits from both state and federal plans, declined to 3.875 million in the week ended November 2 from 3.908 million in the week earlier. Total claims come at a two-week lag to initial claims. Compared to the same time in 2012, total claims were down 26 percent.
12 states reported increases in claims in excess of 1,000 for the week ended November 9. The largest increases in initial claims were in California (+4,737), New York (+2,853) and Pennsylvania. Only one state, Florida (-1,055) reported a decrease in claims in excess of 1,000. The next largest decliners were Kentucky (-580) and Ohio (-409).
The better-than-expected report suggests that the labor markets could be strengthening. It was difficult to get an accurate read from the report recently because of the aforementioned short-term rise in claims skewing the data. Even with claims returning to normalcy, there is still concerns about the U.S. labor market because hiring hasn’t improved as it needs to, as employers seem relatively content with maintaining staff levels, but cautious about expansion.
With the release of the minutes from the latest meeting of the Federal Open Market Committee suggesting that the Federal Reserve is going to begin tapering purchases of Treasuries and mortgage-backed securities, investors and economists will be looking for clear-cut signs that the nation’s economy is getting stronger to support itself without so much help from the main bank.
On that point, the markets are receiving the report today with bullishness. The Dow Jones Industrial Average is ahead by 89 points, the S&P 500 is up by 12 points and the tech-heavy Nasdaq has gained 37 points in Thursday morning action.
