Unemployment claims edge higher

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- The number of Americans filing first-time claims for unemployment insurance rose modestly last week, the government said Thursday.

The figure still came in below analysts' expectations.

There were 434,000 initial jobless claims filed in the week ended Jan. 2, up 1,000 from the previous week's upwardly revised 433,000, the Labor Department said.

A consensus estimate of economists surveyed by Briefing.com expected claims to jump to 440,000.

The 4-week moving average of initial claims totaled 450,250, down 10,250 from the previous week's revised average of 460,500. The average figure has dropped more than 30% since it peaked last April.

"At a minimum, any deterioration in the labor market has diminished and the declining trend of jobless claims reinforces the possibility of a decisive return of job growth as early as the spring of 2010," said John Lonski, chief economist at Moody's Economy.com.

Continuing claims: The government said 4,802,000 people filed continuing claims in the week ended Dec. 26, the most recent data available. That's 179,000 down from the preceding week's unrevised 4,981,000 claims.

The 4-week moving average for ongoing claims fell by 95,250 to 5,005,750 from the previous week's revised 5,101,000.

Don't break out the champagne just yet. The slide may just be signaling that more filers are dropping off those rolls into extended benefits.

Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, or people whose benefits have expired.

Congress passed legislation in November to extend federally paid benefits up to 99 weeks, depending on the state, but the law only helps those who exhausted their federal unemployment lifelines by the end of last year.

Lawmakers passed measures in December to extend the filing deadline through the end of February.

Both chambers initially introduced bills to push the deadline to apply for benefits through 2010 or beyond, but Democratic leaders in the House scaled back the effort in hopes of getting the bill through the Senate more quickly.

State-by-state: Jobless claims in 12 states declined by more than 1,000 for the week ended Dec. 26, the most recent data available. Claims in California dropped the most, by 23,160, which the state attributed to a holiday-shortened week and fewer layoffs in the construction and service industries.

A total of 14 states said the claims increased by more than 1,000. Claims in Pennsylvania jumped the most, by 9,653, which the state said was due to layoffs in the construction, service, food and transportation industries.

Outlook: With layoffs slowing, Lonski expects job growth may be near.

"Fewer layoffs implies that financial conditions of businesses have improved," he said. "In time, businesses will need to hire more workers in order to fulfill customers' needs."

He added that the unemployment rate could have peaked October at 10.2%, and employers could start adding enough jobs to see positive job growth as early as March.

The unemployment rate dropped to 10% in November, according to the Labor Department, which is due to release the December report Friday. Economists surveyed by Briefing.com expect the rate to remain at 10%.

Even if the December report shows a rise in the unemployment rate, Lonski said the declining trend of jobless claims is so strong that an uptick could be reversed in January. He added that jobless claims are a leading indicator and more telling for the future of the labor market that the unemployment rate, which is a lagging indicator.

But Lonski also warned that when job growth arrives, it will be gradual.

"My worry is that renewed weakness on the housing front short circuits the recent progress of stabilizing the labor market," he said.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,122.01 15.31 0.09%
Nasdaq 4,569.62 -1.02 -0.02%
S&P 500 2,000.12 0.10 0.00%
Treasuries 2.36 -0.03 -1.25%
Data as of 5:31pm ET
Company Price Change % Change
Bank of America Corp... 16.20 -0.13 -0.80%
Apple Inc 102.13 1.24 1.23%
Facebook Inc 74.63 -1.33 -1.75%
Yahoo! Inc 38.18 0.39 1.03%
Pfizer Inc 29.49 0.28 0.96%
Data as of 4:02pm ET

Sections

As Elon Musk cancels the latest launch of a SpaceX rocket, he's also got some "horrible nightmares" to contend with. More

Former Fed chief Ben Bernanke believes the 2008 financial crisis was the worst in global history, topping even the Great Depression. More

Tech fans are already excited about the launch of Apple's iPhone 6 next month. There's now a report suggesting that the iWatch could be coming too. Wall Street is pleased. More

Utah State professor Michael Glauser cycled 4,000 miles this summer, visiting 100 entrepreneurs across the country. Here's a snapshot of how they grew their businesses. More

Mary Fallon, from Durham, Maine, is a mother of three children, two dogs, 25 chickens and a flock of 22 sheep. Here are journal entries from a day in her life. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.