Join        Login             Stock Quote

Jobless Claims Fall To Pre-Hurricane Levels

 December 06, 2012 09:41 AM

New filings for jobless benefits fell again last week, offering another statistical talking point to argue that the dramatic surge in new claims for the week through November 11 was a temporary effect from Hurricane Sandy. Since then, claims have dropped for three consecutive weeks. The overall decline in the last three reports is substantial, pushing last week's claims data down to the range that prevailed before the storm hit, albeit on the high side of the pre-storm range. But for now, there's quite a bit more confidence for asserting that the claims numbers again suggest that slow growth for the labor market remains a reasonable outlook.

[Related -Market Needed a Yellen Bump and Didn't Get It.]

Exhibit A is last week's drop in new filings for unemployment benefits, which retreated by 25,000 to a seasonally adjusted 370,000, or slightly below the four-week average for the week ahead of the sharp increase in claims due to the storm. As today's press release notes, the biggest drop last week among the states was a 24,000 slide in New Jersey, which—according to the Labor Department—reported "fewer storm related claims, primarily from the construction, transportation and warehousing, manufacturing, trade, and accommodation and food service industries." By comparison, the biggest state increase was 5,000 in Wisconsin.

[Related -Will The Sluggish US Housing Market Perk Up This Year?]

Turning to the unadjusted numbers on a year-over-year basis—a more robust measure of the trend for this leading indicator—we find that new claims across the U.S. generally continue to drop relative to year-earlier levels. For the third week in a row, weekly filings are falling on an annual basis, which amounts to a return to the prevailing pre-hurricane trend of the past three years. That's a strong signal on the side of optimism for thinking that the economy will continue to create new jobs on a net basis.

What's not to like? The unadjusted annual decline remains modest, with claims falling by roughly 6% last week vs. a year ago. The pre-storm trend was closer to a 10% drop. Nonetheless, the fact that new claims are again trending lower, albeit at a slower pace, is encouraging.

It's still too soon to argue that the claims data has returned to "normal." But the speculative cries of recent weeks from some corners that the early November surge in new filings was a sure sign that the labor market is collapsing is all but dead with today's report. Yes, there are other demons to worry about when it comes to assessing jobs growth, starting with the low pace of new hires. But arguing that the claims numbers clearly point to trouble continues to fade as a compelling narrative. That's no guarantee that we won't run into trouble in the weeks ahead, but based on the numbers in hand there's no smoking revolver here.
iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageWill The Sluggish US Housing Market Perk Up This Year?

Housing remains a weak spot for the US economy, as suggested by yesterday’s news of a bigger-than-expected read on...

article imageThe Only Homebuilders To Own Right Now

Now is the time to invest in the housing market, but you must be read on...

article imageUS Economic Growth Slows in Q4

US GDP growth fell short of expectations in last year’s fourth quarter, the government reports. National read on...

article imageReversals After a Gap on the Open Could Mean Anything

Yesterday stock indexes gapped up on the open but then reversed course to close sharply lower. This type of read on...

Popular Articles

Daily Sector Scan
Partner Center

Related Articles:

The Only Homebuilders To Own Right Now
More Articles on: Economics Data

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.