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The number of Americans who filed for unemployment benefits increased last week. 


Initial jobless claims worse than expected last week

by Qixin Wang
Jan 12, 2012


The number of Americans who filed for unemployment benefits unexpectedly increased last week, the Labor Department said Thursday, in a report that ended a recent series of positive readings of the nation’s labor market.

 The number of Americans who filed for unemployment benefits unexpectedly increased last week, the Labor Department said Thursday, in a report that ended a recent series of positive readings of the nation’s labor market.

For the week ended January 7, seasonally adjusted initial unemployment claims nationwide totaled 399,000, up 24,000 from the prior week’s revised 375,000.

Economists closely follow initial first-time jobless claims, which essentially measure jobs lost, because the data offer clues about the health of the labor market. In recent weeks, claims had been trending downward, suggesting that conditions might be improving. Claims dropped for four of the six past weeks, and in mid-December fell to 366,000, the lowest reading since mid-2008.

Thursday’s report was a surprise for economists surveyed by Bloomberg L.P., who had been expecting 375,000 new claims. The slower performance, they suggested, might signal a slowdown of the nation’s employment market. But they also cautioned against over-interpreting the information.

“The claims data can be very volatile around this time of the year, so we do not want to read too much into one week of data,” said JPMorgan Chase & Co. economist Daniel Silver in an online comment.
Given the potential for further big layoffs, not everyone is convinced claims will resume their decline.

“Many of the layoffs associated with cuts in the U.S. Postal Service, however, are still ahead of us, while state and local governments continue to cut, just not as rapidly as they did in 2011,” Diane Swonk, chief economist of Chicago-headquartered financial services firm Mesirow Financial Inc. said in her blog. Swonk suggested claims will most likely move higher in coming weeks.

Since the weekly data tends to be volatile, the Labor Department also issues a four-week moving average that helps smooth out short-term fluctuations. For the latest week, the rolling average rose 7,750 to 381,750.

Claims have been flirting with 375,000, a number many economists consider an important benchmark: When claims drop below that level and stay, the nation’s unemployment rate will begin to decline.

The latest data may contain a few question marks, Comerica Inc. economist Robert A. Dye suggested in an online note. “The largest increases in initial claims for the week came from Michigan and Wisconsin, which points to something happening in durable goods manufacturing, which may prove to be a temporary statistical glitch,” Dye said.
For the week ended January 7, seasonally adjusted initial unemployment claims nationwide totaled 399,000, up 24,000 from the prior week’s revised 375,000. 

 
Economists closely follow initial first-time jobless claims, which essentially measure jobs lost, because the data offer clues about the health of the labor market. In recent weeks, claims had been trending downward, suggesting that conditions might be improving.  Claims dropped for four of the six past weeks, and in mid-December fell to 366,000, the lowest reading since mid-2008.

 
Thursday’s report was a surprise for economists surveyed by Bloomberg L.P., who had been expecting 375,000 new claims. The slower performance, they suggested, might signal a slowdown of the nation’s employment market. But they also cautioned against over-interpreting the information.

 
“The claims data can be very volatile around this time of the year, so we do not want to read too much into one week of data,” said JPMorgan Chase & Co. economist Daniel Silver in an online comment.
Given the potential for further big layoffs, not everyone is convinced claims will resume their decline.

 
“Many of the layoffs associated with cuts in the U.S. Postal Service, however, are still ahead of us, while state and local governments continue to cut, just not as rapidly as they did in 2011,”  Diane Swonk, chief economist of Chicago-headquartered financial services firm Mesirow Financial Inc. said in her blog.  Swonk suggested claims will most likely move higher in coming weeks.

 
Since the weekly data tends to be volatile, the Labor Department also issues a four-week moving average that helps smooth out short-term fluctuations. For the latest week, the rolling average rose 7,750 to 381,750.

 
Claims have been flirting with 375,000, a number  many economists consider an important benchmark: When claims drop below that level and stay, the nation’s unemployment rate will begin to decline.

 
The latest data may contain a few question marks, Comerica Inc. economist Robert A. Dye suggested in an online note. “The largest increases in initial claims for the week came from Michigan and Wisconsin, which points to something happening in durable goods manufacturing, which may prove to be a temporary statistical glitch,” Dye said.