Initial Jobless Claims Fall to 350,000 in Week Ended December 22

The Labor Department reported Thursday morning that applications for initial jobless benefits dropped by 12,000 to a seasonally adjusted 350,000 for the week ended December 22, exceeding economist forecasts of a mild decline to 360,000.  Meanwhile, the figures for the week ended December 15 were upwardly revised from 361,000 to 362,000.

The drop in claims last week has now taken the number of claims back below pre-Sandy levels when the hurricane that rocked the East Coast caused a spike in the number of people seeking benefits.

The federal agency said that it is possible that the decline for the Dec. 22 week may have been skewed by the Christmas holiday as many state agencies were closed on Monday and Tuesday, leading to the Labor Department to rely upon more estimates than normal.  Claims in 19 states and territories were estimated for today’s report, far more than the one or two that is typical.

The one-month moving average, a less-volatile measure of labor trends, decreased by 11,250 to 356,750 from the prior week’s revised average of 368,000.

Continuing claims – those people already receiving benefits, not including people receiving extended benefits under federal programs – fell by 32,000 to 3.21 million for the week ended December 15.

Extended or emergency claims – the number of people collected federal benefits after exhausting state benefits – rose by about 4,500 to 2.15 million.  Extended benefit claims are calculated with a two-week lag.

The total number of people receiving benefits in all programs for the week ended December 8 was 5.48 million, a rise of 73,279 from the week prior, but still well below the 7.23 million in the comparable week in 2011.

It’s particularly notable that the number of people receiving extending benefits could substantially drop if lawmakers in Washington cannot bridge the impasse and find resolve to the upcoming fiscal cliff, an series of automatic tax hikes and spending cuts set to occur at the end of 2012.  If the US goes over the cliff, laws extending state benefits will disappear.

Alaska reported the highest insured unemployment rates for the week ended December 8 at 6.2 percent, followed by New Jersey (3.9%) and Pennsylvania (3.8%).