Claims decline 29,000 to 343,000 and sit near a four-year low
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The number of people who applied for new U.S. unemployment benefits last week fell below pre-Sandy levels and hovered near a four-year low.
Initial jobless claims declined by 29,000 to a seasonally adjusted 343,000 in the week ended Dec. 8, the Labor Department said Thursday.
Claims from two weeks ago were revised upward to 372,000 from an initial reading of 370,000.
Economists surveyed by MarketWatch had forecast claims to fall to 370,000 on the expectation that the effects of Hurricane Sandy would continue to fade. Applications for new jobless benefits had soared to an 18-month high of 451,000 last month in the wake of the storm.
The level of claims almost matched a 2012 low of 342,000 set in the first week of October, a number that appeared to be skewed by end-of-the quarter quirks. The last time weekly claims were below 340,000 was in early 2008, just after the last recession started.
Yet claims can also be quite volatile around the holiday season because of temporary hiring and seasonal layoffs in businesses like construction. Government statisticians try to adjust for these seasonal changes but they don’t always get it right. Economists say a “clean” reading on weekly claims might not be available until mid- to late January.
New claims are a rough gauge of whether layoffs are rising or falling.
Economists are also watching to see if the budget impasse in Washington is having any effect on employment. Business leaders say they are reluctant to add employees until they see what happens. A series of tax hikes and spending cuts will take effect in January unless Democrats and Republicans reach a deal.
The one-month average of claims, typically a more accurate number that smooths out weekly volatility, fell by 27,000 to 381,500. Yet that average has been distorted by Sandy and it will take longer for the effects to disappear from the moving average.
In the week ended Dec. 1, meanwhile, continuing claims dropped by 23,000 to a seasonally adjusted 3.2 million. Continuing claims reflect the number of people who already receive regular unemployment benefits, which last about 26 weeks in most states.
Jeffry Bartash is a reporter for MarketWatch in Washington.
