The number of Americans filing for first-time jobless benefits dropped sharply last week, according to the latest report from Washington Thursday morning, an encouraging sign for strengthening of the job market.
Department of Labor Statistics Show Fewer Jobless Claims
The Labor Department reported that initial jobless claims for the week ended November 30 declined by 23,000 to 298,000 from an upwardly revised 321,000 (from 316,000) the week earlier. It was the third straight week of declining claims and seventh drop in the last eight weeks. It was also the first time that claims have been below 300,000 since the week ended September 7 (294,000 claims). The new figure was far below economist predictions of an increase to 323,000.
The four-week moving average, often regarded as a better gauge of labor trends because it irons out weekly volatility, fell to 322,250 from a revised 333,000 a week prior.
No special factors influenced the report and no states were estimated, according to the Labor Department, but the agency faces challenges with adjusting to data for seasonal fluctuations, such as the Thanksgiving holiday that was part of today’s report. That challenge exists each year at this time and will continue through January.
Continuing Claims Also Decline
Continuing claims, or those people already collecting state benefits, during the week ended November 23 decreased a seasonally adjusted 21,000 to 2.744 million. Continuing claims are reported at a one-week lag to initial claims.
The total number of people collecting claims from all state and federal program, including extended benefits, rose by 183,227 to 4.097 million for the week ended November 16. Total claims are reported at a two-week lag. At the same time in 2012, total claims were 4.959 million.
The largest increases in initial claims for the week ending November 23 were in California (+8,326), Pennsylvania (+4,416) and Michigan (+3,426). The largest decreases were in New Jersey (-572), Florida (-492) and Idaho (-293).
Labor Stats mean DJIA, S&P Decline for Fifth Straight Day on Taper Concerns
Wall Street is trading in the red for the fifth straight day as traders view the better-than-expected jobs data as increasing the likelihood that the Federal Reserve will begin tapering its economic stimulus package that currently includes buying $85 billion in Treasuries and mortgage-backed securities each month. The initial claims report follows a reports earlier this week that showed the U.S. trade deficit shrank in October and the ISM Manufacturing Index rose in November to 2-1/2 year highs, further lending to the idea of the Fed ratcheting down its stimulus package.
In a separate report today, the Bureau of Economic Analysis made the second revision to third-quarter GDP, showing that the nation grew in Q3 at a 3.6% annualized rate, a huge improvement from the 2.8% pace first estimated last month.
Investor will get a very important piece of data tomorrow when the Labor Department delivers its Employment Situation report, which includes the latest unemployment rate for November.
The Dow Jones Industrial Average is lower in morning trading by 50 points, the S&P 500 is off by 6 points and the Nasdaq is down 8 points.