by Anjana Sundaram
Jan 14, 2010
Seasonally adjusted initial unemployment claims rose 11,000 to a total of 444,000 for the week ended Jan. 9, the Labor Department reported Thursday. The increase in initial claims was 7,000 more than the median forecast by economists who participated in a Bloomberg LP survey.
A decrease in the four-week average, however, may indicate the labor situation is slowly improving. The four-week average was down 9,000, to 440,750 from the previous week’s revised average of 449,750. The four-week moving average is now at its lowest level since Aug. 2008, which suggests fewer job cuts are being made.
Another promising sign of improvement in the labor market is the 4.4 percent drop in continuing claims in the week ended Jan. 2. Continuing claims decreased by 211,000 to 4.96 million in the week ended Jan.2. The four-week average of continuing claims was 4.85 million, down from 5 million.
Illinois had a decrease of 6,928 unadjusted initial claims for the week ended Jan. 2. The decrease was attributed to fewer layoffs in the construction, trade and manufacturing industries.
Robert Shimer, a University of Chicago economics professor, cautioned against jumping to broad conclusions about the labor market based on a single source, particularly weekly generated data. “There is too much noise,” Shimer said.
“It’s true that the number of claims in state programs has been coming down sharply in the past 6 months…but most of them are being shifted to federal EUC 2009 extended unemployment [claims],” Shimer added.
“What’s sort of hidden in these numbers is the continuing coverage… if you include all the various extended benefits, 7 percent of the labor force is receiving unemployment benefits,” Shimer said.