Jobless Claims Jumped More Than Forecast; Raising Concerns

on January 12 2012 8:52 AM
Initial Jobless Claims
The four-week moving average hit a near five-year low, pointing to an ongoing gradual recovery in the labor market. Reuters

The number of Americans filing for first-time unemployment benefits rose last week to the highest level in six weeks after a downtick in the week ended Dec. 31. The figure nearly surpassed a key threshold for gauging the job market, raising concerns about the U.S. employment situation without the help of holiday hiring.

The Labor Department said new claims in the week ended Jan. 7 increased by 24,000 to 399,000. Jobless claims have registered below the key 400,000 mark -- a level historically associated with an improving labor market -- in nine of the past ten weeks. Economists polled by Reuters called for an increase of 3,000.

Thursday's data showed the four-week moving average, considered a less volatile measure of the labor market trends, came in at 381,750, an increase of 7,750 from the previous week's revised average of 374,000.

Continuing claims -- which include people filing for the second week of benefits or more -- were up by 19,000, to 3,628,000 in the week ended Dec. 31.

The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

The 4-week moving average was 3,605,000, unchanged from the preceding week's revised average of 3,609,000.

The unemployment rate dropped unexpectedly to 8.5 percent in December, from 8.6 percent. From April through October, the rate held in a narrow range from 9.0 to 9.2 percent.

Employers added 200,000 people to their payrolls, beating economists' estimate of an increase of 150,000. Over the past 12 months, nonfarm payroll employment has risen by 1.6 million.

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