Blue Christmas: Jobless claims rise to their highest levels in nine months
Data difficult to adjust for seasonal fluctuations around the Thanksgiving and Christmas holidays
It's going to be a blue, blue Christmas for many Americans this year. Claims for unemployment insurance reached their highest in nine months last week. The grim news casts a dark shadow across the U.S. job market,which had previously enjoyed growth spurts over the past several weeks.
Claims increased 53,000 between the November and December survey periods. However, seasonal volatility reduces their usefulness in trying to predict payroll growth.
Economists had originally expected first-time applications to fall to 334,000 last week. The four-week moving average for new claims, which irons out week-to-week volatility, increased 13,250 to 343,500.
"This is not really good. Some of us had thought last week's jump was an aberration. We have to see what's going on here. Obviously the Fed won't be looking at these numbers kindly after what happened yesterday," Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania says.
The risks to the outlook for the economy coupled with the labor market as "having become more nearly balanced," the Federal Reserve said this week. The U.S. central bank announced it would reduce its monthly $85 billion bond buying program by $10 billion beginning next month.
The bureau admits that it's hard to adjust for seasonal fluctuations around the Thanksgiving and Christmas holidays, which lessens its reliability as an indicator of the labor market's health. Other labor market indicators have pointed to a strengthening in job growth.
Last week's claims data covered the period for the December non-farm payrolls survey. Claims increased 53,000 between the November and December survey periods. However, seasonal volatility reduces their usefulness in trying to predict payroll growth.
The economic news wasn't all bad, reflecting the roller coaster nature of the U.S. economy. Payrolls increased solidly in October and November. The unemployment rate dropped to a five-year low of 7.0 percent in November.
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