By Alison Martin
The number of Americans collecting unemployment benefits rose last week, and though experts expected just the opposite, the news doesn’t indicate a declining economy.
In a report for the week ended Jan. 9, the U.S. Department of Labor stated that initial claims increased by 7,000 to 284,000, up from the previous week’s unrevised level of 277,000. The four-week moving average also increased, rising 3,000 to 278,750 from the previous week’s unrevised average of 275,750.
The initial claims report monitors how many people are receiving unemployment benefits from week to week while the four-week moving average is the average of the last four recorded weeks.
The initial claims reading is the second highest since last July, and economists did not expect it. They forecast initial claims dropping to 275,000 and the four-week moving average to 220,000.
Weekly Initial Claims for Unemployment Benefits, 2015-2016
Despite the increase in initial claims, the numbers do not indicate economic decline. For the past 45 weeks, the numbers have come in below 300,000 – the benchmark of a healthy economy. Economists still remain optimistic.
“The claims data can be volatile around this time of year,” J.P.Morgan economist Daniel Silver said in an research note on Thursday, “so we do not want to take too much signal from one week of data.”
While Silver remains skeptical of the numbers, he does believe that the rise in continuous claims could support “the idea that there has been some weakening in the labor market.”
Continuing claims – the number of Americans who collect unemployment benefits on a week-to-week basis – increased by 29,000 to 2.263 million.
In Illinois, the news is slightly better. Illinois experienced one of the largest decreases in initial claims, dropping by 3,633 in the week ended Jan. 2. California, Puerto Rico, Ohio and Maryland also experienced decreases in their numbers of initial claims. New York, Georgia, Pennsylvania, Alabama and Wisconsin all saw increases in the number of residents collecting unemployment benefits.