WASHINGTON — Initial claims for U.S. state unemployment benefits fell by 37,000 to 335,000 in the January 12 employment survey week, plunging to its lowest level in five years, the Labor Department reported Thursday.
Forecasts in a MNI survey of economists had centered around a dip in jobless claims to 370,000. The initially reported 371,000 claims level for the Jan. 5 week was revised up to 372,000.
This advance estimate of initial claims for the Jan. 12 employment survey week is the lowest since it came in at 318,000 in the week of Jan. 19, 2008. In a survey week comparison, jobless claims are 27,000 less compared to the Dec. 15 survey week.
A Labor Department analyst said there were no states estimated in this report, with "nothing unusual" in the state level data.
The analyst warned against placing too much emphasis on the drop in claims, saying part of it is the seasonal adjustment issue.
"There's some volatility in the seasonal adjustment value," he said, adding that a certain amount of imprecision had probably led to a seasonal expectation that was "a bit too high."
"Generally when we experience volatility it tends to be a short-term distortion," the analyst said.
Seasonal adjustment factors expected unadjusted claims to jump by 11.7% or 64,793 in the January 12 week. Instead, unadjusted claims rose a mere 0.4% or 2,360 to 555,708. This will be the peak for unadjusted claims this year, and exceeds the 525,422 level reported in the comparable week a year ago.
Looking ahead to next week's data, the Labor analyst noted that the expectation is for a 20% decline in unadjusted claims.
The state data released for the January 5 week indicated unadjusted initial claims increased in 29 states and declined in 24 states, with no states unchanged. The District of Columbia, Puerto Rico, and Virgin Islands are included in this data.
The initial claims seasonally adjusted 4-week moving average was 359,250 in the January 12 week, an decrease of 6,750 from the previous week.
The level of continuing claims came in at 3.214 million after seasonal adjustment in the Jan. 5 week, an increase of 87,000 from the previous week.
The level of unadjusted continuing claims rose by 170,067 to 3,850,441 in the week, but remains below the 4,109,127 level in the comparable week a year ago.
The seasonally adjusted insured unemployment saw an uptick to 2.5% from 2.4% the prior week, but remains below the seasonally adjusted 2.8% rate in the comparable week a year earlier.
The unemployment rate among the insured labor force is well below that reported monthly by the Labor Department because claims are approved for the most part only for job losers, not the job leavers and labor force reentrants included in the monthly report.
The Labor Department said that the level of unadjusted Emergency Unemployment Compensation benefits claims rose by 67,984 in the December 29 week, bringing that category's total to 2,059,438.
Extended benefits claims rose by a mere 98 to 1,143 in the December 29 week -- the program has ended.
The Labor Department reported that a total of 5,821,966 persons claimed unemployment benefits in the December 29 week, an increase of 465,547 from the previous week but still below the 7,826,846 persons in the comparable week a year ago. These data are not seasonally adjusted, and include regular state claims, federal employee claims, new veterans claims, the EUC and extended benefits programs, state additional benefits, and STC/Workshare claims.
Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.