Jobless Claims Reach Five-Year Low

It was a busy week in Washington.

Within 24 hours of Republicans announcing an agreement to raise the nation’s $16.4 trillion debt limit, the U.S. Department of Labor released its latest employment report showing jobless claims falling to a five-year low.

Jobless claims

The latest jobless claims report shows the number of applications in the U.S. unexpectedly dropped last week to a five-year low, according to the Labor Department. In a statement released Thursday, the Labor Department noted that weekly unemployment benefit applications dropped 5,000 to a seasonally adjusted 330,000, the lowest number since January 2008. The four-week average fell to 351,750, also a new five-year low. The four-week moving average was 351,750, a decrease of 8,250 from the previous week’s revised average of 360,000, according to the agency.

The largest drops in new claims came from states around the nation with New York leading the way. Jobless claims in New York fell by 27,487, in Georgia by 7,250, in North Carolina by 5,541, in Alabama by 4,245, and in Wisconsin by 3,183. The number of people claiming benefits in all programs for the week ending Jan. 5 was 5,659,760, a decrease of 214,076 from the previous week. The number represents a decrease of nearly two million applicants when compared to the same time last year.

Skewed numbers

While the latest jobless claims numbers were widely greeted with optimism from top economists, the Labor Department did note that three states did not submit paperwork confirming jobless claims. Estimates were reported for California, Virginia and Hawaii, department officials said. California, which holds the nation’s largest workforce, could skew the numbers either way. According to local reports, California saw an increase in claims of 10,232, which state officials attributed the change to layoffs in the service, agriculture, forestry and fishing industries.

In addition, the large downswing in numbers may represent the seasonal volatility often associated with the first month following the holiday season.  Critics expect the number of weekly claims to tick higher before January, before dropping sharply in February.

White House response

While the latest jobless claims number is likely to be well received by the White House, administration officials did not comment on the latest report. The Obama administration has in the past greeted unemployment figures with a mix of enthusiasm and caution, warning that the U.S. economy remains far from where it was before the  2008 financial crisis. The decision to not issue a statement seems to follow a strategy adopted by the administration following the conclusion of the 2012 presidential election.  Speaking early this week at his second inauguration, President Obama avoided the topic of unemployment, instead choosing to focus on issues ranging from immigration reform to climate change…

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