US / Jobless claims fall for sixth week out of seven

The number of people filing for new unemployment benefits fell for the sixth time in seven weeks, more evidence the labor market is steadily improving.

Initial claims for jobless benefits, a measure of layoffs, decreased by 10,000 to a seasonally adjusted 316,000 in the week ended Nov. 23, the Labor Department said Wednesday. Economists surveyed by Dow Jones had forecast 330,000 new claims.

The prior week’s level was revised up to 326,000 from the initially reported 323,000. The four-week moving average of claims, which evens out volatility in the weekly data, fell to 331,750.

The numbers were released a day early because of the Thanksgiving holiday. Unemployment figures tend to be volatile in November and December because of holidays, which can complicate the Labor Department’s seasonal adjustments.

“As a result, we do not read too much into this week’s decline and await further releases for more clarity,” Michael Gapen, chief U.S. economist for Barclays, said in a note to clients. “We see jobless claims data as continuing to suggest modest improvement in labor market conditions, but somewhat less than this week’s reading would suggest.”

Still, the overall trend has been one of improvement since the start of the 16-day government shutdown last month. New claims are down 57,000 from the week ending Oct. 5, when dysfunction in Washington caused numbers to spike.

Hiring tends to increase when layoffs decline and other figures suggest the labor market gained some momentum in October despite the partial federal government shutdown and debt-ceiling fight. Employers added 204,000 jobs last month, though the unemployment rate registered a historically high 7.3%.

“This report reinforces the message that the effects of the shutdown-and-debt-limit saga are being shaken off and the recovery in the labor market is still on track,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.

If employers continue to hire at a steady pace, the Federal Reserve may soon decide the economy is strong enough to start trimming its $85 billion-a-month bond-buying program. The stimulus effort is meant to push down interest rates and spur hiring and investment.

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via U.S. Jobless Claims Fall for Sixth Week Out of Seven – WSJ.com.