Initial Jobless Claims Inch Up, But Continuing Claims Plunge

One of these weeks, jobless claims will plunge in a big way as the recovery gains momentum. Alas, the most recent week wasn't it, as initial jobless claims inched 1,000 higher to 434,000 for the week ending Jan. 2, the U.S. Labor Department announced Thursday. However, continuing claims plunged another 179,000 to 4.80 million - - their lowest level in about a year.

A Bloomberg News economists survey had expected jobless claims to total 450,000. Also, the four-week moving average for initial jobless claims fell 10,250 to 450,250 -- its lowest level since September 2008, or before the financial crisis began its acute stage. Economists view the four-week average as a better indicator because it smooths out anomalies for strikes, holidays or other idiosyncratic events. A year ago, initial jobless claims totaled 488,000, and continuing claims totaled 4.53 million.

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 once he/she has lost a job. In general, continuing claims above 3 million reflect a slack labor market and point to extended (six to nine months or longer) job searches.

The largest increases in initial jobless claims for the week ending Dec. 26, the latest week for which data is available, were in Pennsylvania, 9,653; Kentucky, 6,069; Indiana, 5,537; Kansas, 5,166; and Ohio, 4,361. The largest decreases were in California, -23,160; Texas, -7,956; Georgia, -4,661; Florida, -3,736; and North Carolina, -2,993.

Also, the highest insured unemployment rates for the week ending Dec. 19, the latest week for which data is available, were in Alaska, 6.7%; Oregon, 5.9%; Puerto Rico, 5.8%; Nevada, 5.6%; Idaho, 5.5%; Pennsylvania, 5.2%; Wisconsin, 5.2%; Montana, 5.1%; Washington state, 5.1%; and Michigan, 5.0%.

The key take-a-ways from this week's report obviously are the additional, large decline --179,000 -- in continuing claims to 4.8 million, and the significant 10,250 decline in the four-week moving average for initial jobless claims to 450,250. Each is indicative of labor markets that continue to heal -- a welcomed site for investors, policymakers and job seekers.