Four-week average at lowest level in two months
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — First-time claims for unemployment benefits climbed 17,000 in the latest week, though to a level that suggests the U.S. labor market is continuing its steady but painfully slow improvement.
The Labor Department said Thursday that first-time jobless claims rose to a seasonally adjusted 361,000 in the week ended Dec. 15, versus a slightly upwardly revised 344,000 in the prior week. That’s almost exactly in line with the MarketWatch-compiled economist consensus of 360,000.
Claims have fallen sharply from the 451,000 in early November after Hurricane Sandy hit, and by now the hurricane impact looks to be absent. Economists caution about reading too much into data around the holiday season, which can produce anomalies.
The four-week average of claims fell 13,750 to 367,750, a two-month low. The four-week average is closely followed because it’s a smoother look at the employment market.
Claims represent only one side of the jobs market — those exiting — but it’s still closely tracked for signals about the employment market. Readings in this range suggest a slowly improving jobs market. It also suggests the looming fiscal cliff of spending cuts and tax hikes that could be triggered at the beginning of next year have done little to hurt employment, even as they restrain business spending.
More broadly, the unemployment rate has come down from as high as 10% in October 2009 to 7.7% in November.
The Federal Reserve expects the jobless rate won’t get to 6.5% — the point at which it will consider increasing interest rates, so long as inflation remains steady — until 2015. Read more about the Fed’s recent interest-rate decision.
Economists at Deutsche Bank said in a research note Wednesday that that milestone could be reached in a little over a year if the economy accelerates from its current pace.
Though the Commerce Department said the economy in the third quarter grew at a 3.1% rate, a much slower pace is expected for the current quarter. Read more on GDP.
Elsewhere, the Labor Department said continuing claims in the week ended Dec. 8 rose 12,000 to 3.22 million.
About 2.1 million people were claiming Emergency Unemployment Compensation benefits for the week ended Dec. 1, a drop of about 98,000. These people are at risk of losing their benefits depending on how the fiscal-cliff situation is resolved.
State benefits usually run out after 26 weeks, and from there federal programs have kicked in aid.
The total number of people claiming benefits in all programs in the week ended Dec. 1 was 5.4 million, down nearly 239,000 from the prior week.
Steve Goldstein is MarketWatch's Washington bureau chief. Follow him on Twitter @MKTWgoldstein.
