Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=227342
Story Retrieval Date: 8/28/2014 6:14:43 PM CST
Katie Schubauer/Medill Reports
The four-week moving average for unemployment claims increased by 750 from the previous week’s revised average of 332,250
Economists optimistic despite rise in unemployment claims
The number of Americans filing initial claims for unemployment benefits rose for the second week in a row. But economists are downplaying the results, saying the economy is still moving in the right direction.
The U.S. Department of Labor reported 348,000 initial unemployment claims for the week ended Jan 25. That is a 5.8 percent increase from the previous week’s figure of 329,000.
Economists surveyed by Bloomberg LP say the higher-than-predicted claims is normal during this season.
“During this time of year claims tend to be quite volatile due to adverse weather as well as seasonal factors which can be difficult around the holiday time,” said U.S. Economist Brett Ryan of Deutsche Bank Securities, Inc.
Ryan said rather than concentrating on the week’s overall number of claims, the four-week moving average of 333,000 was more indicative of the economy’s current condition. The four-week moving average was an increase of 750 from the previous week’s revised average of 332,250 - a number that has remained consistent since August 2013.
“The trend still remains pretty solid,” Ryan said. “We’d only become concerned if we saw [initial claims] closer to 375,000 or 400,000. As long as claims remain below 350,000 we can remain pretty confident that there are no drastic changes occurring.”
Michelle Girard of RBS Securities Inc. agreed.
“The four-week moving average is really holding very close to the trend we had seen last summer and data is showing that we’re really not changing much from that trend,” Girard said.
Illinois also reported encouraging numbers, as it was among 29 states whose initial unemployment claims fell this week.
Statewide initial unemployment claims fell by 5,139 despite frigid temperatures. Unemployment numbers typically increase during periods of cold weather because certain sectors of the labor force, such as construction, have fewer opportunities for workers.
Greg Rivara, spokesman for the Illinois Department of Employment Security, cautioned not to read too much into the numbers. But with the national employment rate on the decline (6.7 percent reported in December) he still offered a positive outlook for the future.
“I think that there’s reason to be optimistic,” Rivara said. “The unemployment rate has been consistently falling and job creation numbers have been consistently moving in the right direction. The unemployment rate is still too high but we’re moving in the right direction and there’s no reason to believe that momentum will slow down.”