By Kaitlin Schuler
The number of initial jobless claims made by Americans declined last week, indicating continued stability in the country’s labor market as unemployment remains at 5 percent.
According to a report Thursday by the Department of Labor, initial claims decreased by 16,000 to a seasonally adjusted 278,000 in the week ended Jan. 23. Illinois saw a decrease of 3,362 initial claims in the week ended Jan. 16. The state’s current initial claims sit at 16,070, following the national trend of decreasing initial claims.
“The economy is improving nationally and in Illinois,” said Robert Kaestner, director of graduate studies at the University of Illinois at Chicago. Kaestner is also a professor in both the Institute of Government and Public Affairs and the Department of Economics at UIC.
“Corporate earnings seem to be fine,” Kaestner said. “People are nervous because of what’s going on in the stock markets and the volatility there but that doesn’t mean that the economy is getting a cold or going to get sick.”
Initial claims are seen as an important indicator of the health of the economy, as it points to emerging labor market conditions in the United States, according to the Labor Department.
Continuing claims—those who have already filed an initial claim and have experienced a week of unemployment— increased 2.7 percent to 2,268,000 in the week ended Jan. 16. They are reported with a one-week delay.
“Any time the jobs claims decrease it could be because more people are employed, or it could be because people are leaving the labor market,” said Ben Feigenberg, an assistant professor of economics at UIC who focuses on development and labor economics.
Initial claims hit the lowest levels since the 1970s last summer, after a large increase during the recession and a steady decline after March 2009. Feigenberg said this trend is likely to continue, though there are some concerns.
“Given problems in the global economy and large fluctuations in the Chinese market, there are some worries that this will flow into the U.S. labor market,” Feigenberg said, “but we haven’t seen that happen yet.”
The four-week moving average for initial claims was 283,000 in the week ended Jan. 16, down 2,250 from the previous week’s revised average. On the other hand, the four-week moving average for continuing claims for the same period increased 1.7 percent to 2,245,250. These averages help smooth out the effects of random price fluctuations and identify trend direction.
Kaestner also stated that he sees no reason currently for the decline in jobless claims to stop, unless the U.S. is adversely affected by world events in the future.
“It might slow down in terms of employment growth, as more and more people are actually working,” he said, “but that’s a natural consequence of the improving economy.”
According to the Labor Department, no special factors played into this week’s initial claims.