Claims Point in the Right Direction but Holiday Likely Skewed Result
The drop in initial jobless claims was much greater than anticipated, and at just 388,000 for the week ended December 25, the result was the lowest level of weekly claims since July 2008.
There’s no question that the trend in the weekly numbers has been positive since the late summer spike in claims accompanied by fears of a double-dip recession rattled consumers and the markets.
The weekly claims data tends to be volatile and it is certainly possible that this result will not be replicated in the weeks ahead.
Moreover, it’s quite possible that the claims data was skewed by individuals who otherwise would have filed simply not doing so due to the holiday. There is recent precedent for that to occur.
Whether or not we see jobless claims pop back above 400,000 in the weeks ahead, the overall trend remains positive, suggesting that the labor sector is continuing its slow road back to better job creation.
Given the massive job losses that occurred in recent years, however, it will be a long road back.