Weekly Jobless Claims Fall By Much More Than Expected

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In a positive sign for the beleaguered labor market, the Labor Department released a report on Thursday showing that first-time claims for unemployment benefits fell by much more than expected in the week ended February 6th.

The report showed that initial jobless claims fell to 440,000 from the previous week's revised figure of 483,000. Economists had been expecting jobless claims to slip to 465,000 from the 480,000 originally reported for the previous week.

While jobless claims pulled back off the more than two-month high set in the previous week, they remain above the more than one-year low set in late December.

"This is good news considering the unexpected jump in the prior week," said Jennifer Lee, Senior Economist at BMO Capital Markets. "However, it bears repeating how volatile this headline number is."

The Labor Department said that the less volatile four-week moving average edged down 468,5000 from the previous week's revised average of 469,500.

Continuing claims, a reading on the number of people receiving ongoing unemployment help, also fell to 4.538 million in the week ended January 30th from the preceding week's revised level of 4.617 million.

With the decrease, continuing claims fell to their lowest level since coming in at 4.487 million in the week ended January 3rd, 2009.

The report also showed that those receiving emergency unemployment compensation fell by about 185,000 in the week ended January 23rd to 5.448 million. On the other hand, those receiving extended benefits increased by about 13,000 in the week ended January 23rd to 236,000.

Looking ahead, Lee said, "Bear in mind that next week's data (which will cover this week) will be skewed due to the massive snowstorms that have blanketed the Mid-Atlantic. So we will likely see a sharp decline."

The Labor Department released a separate report last Friday showing an unexpected drop in total employment in the month of January. At the same time, the report also showed a surprise drop in the unemployment rate.

The report showed that non-farm payroll employment fell by 20,000 jobs in January following a revised decrease of 150,000 jobs in December. Economists had expected employment to edge up by 15,000 jobs compared to the loss of 85,000 jobs originally reported for the previous month.

However, the Labor Department also said that the unemployment rate unexpectedly fell to 9.7 percent in January from 10.0 percent in December. The decrease surprised economists, who had expected the unemployment rate to remain unchanged at 10.0 percent.

With the unexpected decrease, the unemployment rate fell to its lowest level since a matching rate in August of 2009, although it still remains at a historically high level.

Peter Boockvar, equity strategist for Miller Tabak, said, "Based on last Friday's January jobs report, we know job hiring still remains punk, but at least the pace of net firing has come to a near halt."

In a positive sign for the beleaguered labor market, the Labor Department released a report on Thursday showing that first-time claims for unemployment benefits fell by much more than expected in the week ended February 6th. The report showed that initial jobless claims fell to 440,000 from the previous week's revised figure of 483,000. Economists had been expecting jobless claims to slip to 465,000 from the 480,000 originally reported for the previous week. (Market News Provided by RTTNews)