The number of U.S. workers filing first-time unemployment claims fell in the last week of January, reaching a near five-year low. That indicates a labor market that is still struggling, while remaining on track for recovery.
Unemployment claims drops by 5,000
According to a February 7 report from the U.S. Department of labor, the number of initial jobless claims declined by 5,000 from the previous week to 366,000, seasonally-adjusted. A poll of economists taken by Dow Jones Newswires had predicted the number would be only slightly less, around 360,000.
Meanwhile, initial jobless claims for the week ended January 26 were revised up to 371,000 from the original 368,000 estimate.
A measure of layoffs
The number of new jobless claims is a gauge of layoffs in the nation. As they decline, it is expected that hiring will pick up. The four-week moving average, a more accurate measure that smooths out weekly volatility, fell from 352,750 to 350,000. The measure has not dropped that low since early 2008.
Slow progress indicated, again
Although growth in the labor market is indicated, it is still at a snail’s pace — a refrain American consumers are likely tired of hearing.
Russell Price, an economist at the Michigan-based Ameriprise Financial, said, “The labor market is improving, but certainly not at a robust rate by any means.”
Jobless claims were volatile in the prior two months due to holidays the dates on which weeks ended. However, that is smoothing itself out, according to an analyst at the Department of Labor. Those fluctuations are typical of the season.
Other economic indicators
Meanwhile, the report also showed that the number of job seekers who were continuing to receive state jobless benefits beyond their initial week’s claim rose by 8,000 to 3,224,000 in the week ended January 26. Also, in that same week, the number of people requesting jobless benefits was about equal to 2.5 percent of the workforce, unchanged from the week before. Those numbers lag a week behind the initial claims data.
The Labor Department’s jobs report the prior week showed that the nation had gained 157,000 new jobs in January. That was better than some had anticipated. Still, it did not stop the unemployment rate from ticking up to 7.9 percent. The unemployment rate is gleaned from a separate poll of consumers.