Initial jobless claims plummeted 35,000 to 466,000 for the week ending Nov. 21, and continuing claims continued to decline as well, falling 190,000 to 5.42 million, the U.S. Labor Department announced Wednesday. This marks the lowest initial jobless claims total in more than a year.
Economists surveyed by Bloomberg News had expected initial jobless claims to fall to 495,000. Meanwhile, the four-week moving average for initial jobless claims also dropped, falling 16,500 to 496,500. A year ago, initial jobless claims totaled 520,000 and continuing claims totaled 4.02 million.
Regarding jobless claims, economists view the four-week average as a better indicator of unemployment conditions, as it smooths out anomalies such as strikes, holidays, or other idiosyncratic events.
Economists also monitor the continuing claims stat because it provides a snapshot of how long it's going to take the typical person to find comparable employment after sustaining a job loss. In general, continuing claims above 3 million reflect a slack labor market and point to extended job searches of 6 to 9 months or longer.
The largest increases in initial claims for the week ending Nov. 14, the latest week for which data is available, were in: Florida, 1,313; Indiana, 607; Hawaii, 278; and North Dakota, 81. The largest decreases were in California, -7.987; Texas, -4,710; Pennsylvania, -4,321; Wisconsin, -2,716; and Ohio, -2,486.
Also, the highest insured unemployment rates for the week ending Nov. 7, the latest week for which data is available, were in: Puerto Rico, 6.2%; Oregon, 5.5%; Alaska, 5.1%; Nevada, 5.1%; Pennsylvania, 4.9%; Wisconsin, 4.9%; Arkansas, 4.7%; California, 4.7%; Michigan, 4.6%; North Carolina, 4.6%; and Washington state, 4.6%.
Keep in mind that it's only one week, but the large drop in initial jobless claims is encouraging, as is the 16,500 plunge in the four-week moving average. Economists were expecting a large drop in jobless claims to occur at some point after GDP turned positive in Q3, as other job-market data points suggest that major lay-offs are abating. Note also how the states with the highest increases in jobless claims totals (Florida, Indiana etc.) are registering lower and lower increases as the recovery progresses – that's a healthy sign. Further, investors should ignore next week's jobless claims stat, as it will contain data in a holiday-shortened week. The next meaningful checkpoint for jobs is two weeks away. If jobless claims maintain a roughly 10,000 to 15,000 per week downward trek, that would indicate that labor markets are healing – a welcome sight for investors, policy makers and prospective jobs seekers alike.
More good news in employment: Initial jobless claims plunge to 466,000