Maybe the job market is kicking in now. That's the subtext of a very positive jobless claims report for the February 5 week that shows a steep 36,000 decline in initial claims to 383,000 for the lowest total in 2-1/2 years (prior week revised 4,000 higher to 419,000). The Labor Department said weather effects, which delay the filing and processing of claims, are unwinding in a comment that suggests the latest level may be free of distortion. The four-week average, which helps even out weekly distortions, fell a very substantial 16,000 to 415,500, a level however that is little changed from month-ago readings.
Continuing claims are clearly coming down in what is probably a positive indication of labor market strength though some of the decline undoubtedly reflects the expiration of benefits as the unemployed fall out of the insured pool. Continuing claims, in data for the January 29 week, fell 47,000 to a two-year low of 3.888 million. The unemployment rate for insured workers is unchanged at 3.1 percent. In unadjusted data for the January 22 week, the total number of claims rose more than 106,000 to 9.406 million.
Markets aren't reacting much to this report, at least initially though the dollar is firming. One week's data is only one week's data and improvement will have to continue before meaningful gains can be expected for February payrolls.
Recent History Of This Indicator
Initial jobless claims in the January 29 week fell a very steep 42,000 to 415,000 as a weather-related pile up of claims in the South unwound. Nonetheless, the four-week average was up 1,000 to 430,500 to show a roughly 15,000 rise from a month ago. Extreme winter weather will likely weigh on claims for the February 5 week.