20 Jan 2011 U.S. Jobless Claim Data 19:24
WASHINGTON (MarketWatch) — First-time applications for jobless benefits fell by 37,000 last week to 404,000, mostly reversing a sharp spike earlier this month, according to Labor Department data.
Yet the latest drop doesn’t reflect a sudden improvement in hiring trends: Labor officials attributed the prior spike in claims to a backlog that built up over the holidays. State unemployment offices were open fewer hours and some people were unable to file applications right away. As the backlog was processed claims were expected to recede.
The decline is sure to be welcomed by investors after two straight increases in applications. Still, U.S. stock-index futures remained pointed lower following the release of the claims data. See more on pre-market action on Wall Street.
New claims for jobless benefits jumped by a combined 50,000 in the first two weeks of January after falling to a 2 1/2-year low of 391,000 in late December.
Most economists believe claims have to fall 400,000 on a sustained basis to indicate a faster pace of job creation.
Economists polled by MarketWatch had expected initial claims in the week ended Jan. 15 to fall to a seasonally adjusted 420,000. The prior week’s claims were revised down by 4,000 to 441,000.
Also lower, the four-week average of new claims through Jan. 15 fell 4,000 to 411,750, matching the lowest level of the past two years. The moving average is considered a more accurate gauge of employment trends because it smooths out fluctuations in the data caused by special factors such as holidays or bad weather.
The number of people who continue to receive unemployment checks, meanwhile, dropped by 26,000 to a seasonally adjusted 3.86 million in the week ended Jan. 8.
While most economists expect hiring to accelerate in 2011, few believe that companies will add new workers fast enough to slash the nation’s unemployment rate, which stood at 9.4% in December.
Although the economy added 103,000 jobs in December, for example, that’s not enough to keep up with the natural growth of the workforce. Job growth would have to average 300,000 or more each month over a prolonged period to reduce unemployment to pre-recession levels.
More than 8 million Americans lost their jobs at the height of the 2007-2009 downturn.
Altogether, 9.61 million people received some kind of state or federal benefits in the week of Jan. 1, on an unadjusted basis. That was up 401,237 from the prior week.
The government paid extended federal benefits to 4.68 million people in the states hurt most by the recession, up slightly from the prior week. Many recipients are eligible for up to one year of additional checks following an extension of benefits recently passed by Congress.
__By Jeffry Bartash
WASHINGTON (MarketWatch) — First-time applications for jobless benefits fell by 37,000 last week to 404,000, mostly reversing a sharp spike earlier this month, according to Labor Department data.
Yet the latest drop doesn’t reflect a sudden improvement in hiring trends: Labor officials attributed the prior spike in claims to a backlog that built up over the holidays. State unemployment offices were open fewer hours and some people were unable to file applications right away. As the backlog was processed claims were expected to recede.
The decline is sure to be welcomed by investors after two straight increases in applications. Still, U.S. stock-index futures remained pointed lower following the release of the claims data. See more on pre-market action on Wall Street.
New claims for jobless benefits jumped by a combined 50,000 in the first two weeks of January after falling to a 2 1/2-year low of 391,000 in late December.
Most economists believe claims have to fall 400,000 on a sustained basis to indicate a faster pace of job creation.
Economists polled by MarketWatch had expected initial claims in the week ended Jan. 15 to fall to a seasonally adjusted 420,000. The prior week’s claims were revised down by 4,000 to 441,000.
Also lower, the four-week average of new claims through Jan. 15 fell 4,000 to 411,750, matching the lowest level of the past two years. The moving average is considered a more accurate gauge of employment trends because it smooths out fluctuations in the data caused by special factors such as holidays or bad weather.
The number of people who continue to receive unemployment checks, meanwhile, dropped by 26,000 to a seasonally adjusted 3.86 million in the week ended Jan. 8.
While most economists expect hiring to accelerate in 2011, few believe that companies will add new workers fast enough to slash the nation’s unemployment rate, which stood at 9.4% in December.
Although the economy added 103,000 jobs in December, for example, that’s not enough to keep up with the natural growth of the workforce. Job growth would have to average 300,000 or more each month over a prolonged period to reduce unemployment to pre-recession levels.
More than 8 million Americans lost their jobs at the height of the 2007-2009 downturn.
Altogether, 9.61 million people received some kind of state or federal benefits in the week of Jan. 1, on an unadjusted basis. That was up 401,237 from the prior week.
The government paid extended federal benefits to 4.68 million people in the states hurt most by the recession, up slightly from the prior week. Many recipients are eligible for up to one year of additional checks following an extension of benefits recently passed by Congress.
__By Jeffry Bartash
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