First-time claims for U.S. unemployment benefits fell by much more than anticipated in the week ended January 12th, according to a report released by the Labor Department on Thursday, with claims falling to their lowest level in five years.
The report showed that initial jobless claims fell to 335,000, a decrease of 37,000 from the previous week’s revised figure of 372,000.
Economists had been expecting jobless claims to show a much more modest decrease to 368,000 from the 371,000 originally reported for the previous week.
With the much bigger than expected drop, jobless claims fell to their lowest level since hitting 318,000 in the week ended January 19, 2008.
However, Jim O’Sullivan, chief U.S. economist at High Frequency Economics, noted, “The claims data tend to be more volatile than usual around this time of year, reflecting seasonal adjustment challenges related to huge swings on a not seasonally adjusted basis.”
The Labor Department said the less volatile four-week moving average fell to 359,250, a decrease of 6,750 from the previous week’s revised average of 366,000.
Meanwhile, continuing claims, a reading on the number of people receiving ongoing unemployment assistance, rose to 3.214 million in the week ended January 5th from the preceding week’s revised level of 3.127 million.
The four-week moving average of continuing claims fell to 3,195,750, a decrease of 6,000 from the preceding week’s revised average of 3,201,750.
“Through the volatility, the trend has probably not changed significantly relative to a few months ago, but, as usual, claims remain important to watch,” O’Sullivan said.
Earlier this month, the Labor Department released a separate report showing that U.S. employment increased in line with estimates in December, with non-farm payroll employment rising by 155,000 jobs in December following an upwardly revised increase of 161,000 jobs in November.
The Labor Department also said the unemployment rate came in at 7.8 percent in December, unchanged from the previous month’s revised figure.
by RTT Staff Writer
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