The Department of Labor reports today that the number of initial jobless claims jumped 35,000 last week to 445,000, ending a string of weekly reports that showed some decline from the levels experienced throughout 2010. The report starts 2011 in similar position as the stagnation of the last 12 months:
In the week ending Jan. 8, the advance figure for seasonally adjusted initial claims was 445,000, an increase of 35,000 from the previous week’s revised figure of 410,000. The 4-week moving average was 416,500, an increase of 5,500 from the previous week’s revised average of 411,000.
The advance seasonally adjusted insured unemployment rate was 3.1 percent for the week ending Jan. 1, a decrease of 0.2 percentage point from the prior week’s unrevised rate of 3.3 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Jan. 1 was 3,879,000, a decrease of 248,000 from the preceding week’s revised level of 4,127,000. The 4-week moving average was 4,056,500, a decrease of 72,000 from the preceding week’s revised average of 4,128,500.
Reuters is not pleased, and even brought back the “U” word for this special occasion:
U.S. jobless claims jumped unexpectedly last week to their highest level since October, suggesting the labormarket is still in a rut despite signs of improvement in the economy.
The number of Americans filing for first-time unemployment benefits rose to 445,000 from an upwardly revised reading of 410,000 in the prior week, the Labor Department said on Thursday. It was the biggest one-week jump in about six months, confounding analyst forecasts for a small drop to 405,000.
A Labor Department official noted the rebound occurred following the holidays, which may have hindered reporting of new claims and created a backlog.
That certainly may be the case, although usually the holidays produce troughs instead of spikes. Also, even with the decent retail holiday season, many of these retailers have to scale back at the end. That would usually get smoothed out through seasonal adjustments, but if layoffs were higher than usually seen, it would show a spike. Indeed, the number of actual claims through state programs rose almost 200,000 last week, although it’s still lower than the same week last year.
The markets responded to the news with only light losses, however. The S&P lost 1.7 points and the Dow went down 8 points, which means that while no one was enthused about the report, it was hardly “unexpected.” This looks like we are resuming where we left off before the holidays and returning to the stagnation levels of unemployment we experienced all through 2010.