New Jobless Claims Fall, Remain Above 450,000

This morning, the Labor Department announced that initial weekly jobless claims fell to 454,000. The number of people continuing to receive benefits fell to the lowest level in seven months, in large part due to Congress’ inability to renew federally extended benefits. The broader trend remains: Initial claims have failed decline materially since the beginning of the year, a stall-out that implies a higher unemployment rate and continued distress in the jobs market.

Economists had expected initial claims to drop to around 460,000, so, for the first time in some weeks, initial claims beat expectations. The 21,000 drop in initial claims brings them down to the lowest level since May. But the four-week average is a sobering 466,000, and most economists say that initial claims need to fall into the 300,000s or lower to bring down the broader unemployment rate.