US Initial Jobless Claims Fall To 5-Year Low, Likely On Seasonal Swings

on January 24 2013 8:56 AM

Fewer Americans than forecast lined up for new jobless benefits last week, the Labor Department said on Thursday, though the number may have been distorted by seasonal factors. Claims tend to be volatile at the start of the year.

In the week ending Jan. 19, applications for unemployment insurance payments declined by 5,000 to a seasonally adjusted 330,000, the lowest level since January 2008. Economists polled by Reuters had forecast claims to rise to 355,000 last week. Initial claims from two weeks ago were unrevised at 335,000.

A Labor Department analyst said claims data were estimated for three states last week, but there was nothing unusual in the state level data, according to Reuters.

The four-week moving average, which normally provides a better indication of the underlying trend in labor markets than the weekly number of jobless claims, dropped by 8,250 to 351,750 for first-time benefit applicants, the lowest since March 2008.

The number of people filing for benefits after an initial week of aid fell 71,000 to 3.16 million in the week ending Jan. 12. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

Job gains are of great importance, because they lead to income growth, and that supports consumer spending, which accounts for more than 70 percent of the U.S. economy.

December was yet another month of job growth that is just about enough to keep pace with the underlying growth in the labor force, but not enough to drive the unemployment rate markedly lower. Nonfarm payrolls grew 155,000 last month, according to the Labor Department, while the unemployment rate held at 7.8 percent after the November figure was revised upward from a previously reported 7.7 percent.

More News from IBT MEDIA