Weekly Initial Jobless Claims Fall to Two-Year Low
Today, the Labor Department announced that weekly initial jobless claims had fallen to a nearly two-year low — declining 29,000 to 429,000. That is the lowest number of initial claimants since the third week of August 2008. Here is a chart of weekly claims since the beginning of 2008, when unemployment began its precipitous rise.
Economists had expected claims to come in much higher — around 450,000, where they have been stuck for months. Claims need to decline into the 300,000s or lower to make a dent in the overall unemployment rate. The four-week moving average, a better measure of underlying trends, as the weekly data tend to be jumpy, declined to 455,250. Here is a chart since 2006, showing the stall-out in the decline in claims on the right.
Economists will be looking for a sustained decline in initial claims to see real improvement in the job market. The Labor Department said the fall in initial claims is due to an unusually low number of factory closings and layoffs, as manufacturing and the auto industry have already contracted so sharply over the past two years and have fewer factories to shut down.