While the data continues to reflect the impact of the holidays, the Labor Department released a report on Thursday showing that first-time claims for U.S. unemployment benefits fell by more than expected in the week ended January 4th.
The report said initial jobless claims dropped to 330,000, a decrease of 15,000 from the previous week's revised figure of 345,000.
Economists had expected jobless claims to edge down to 335,000 from the 339,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims fell to their lowest level since dropping to 305,000 in the week ended November 30th.
Peter Boockvar, chief market analyst at the Lindsey Group, said, "The week was still likely influenced by seasonal adjustment issues around the holiday but all states gave their actual figures with no estimates and the Labor Dept. said the weather didn't impact the filings."
The Labor Department said its less volatile four-week moving average fell to 349,000, a decrease of 9,750 from the previous week's revised average of 358,750.
Meanwhile, continuing claims, a reading on the number of people receiving ongoing unemployment assistance, rose to 2.865 million in the week ended December 28th from the preceding week's revised level of 2.815 million.
The four-week moving average of continuing claims also rose to 2,872,250, an increase of 18,750 from the preceding week's revised average of 2,853,500.
"Claims data are often volatile from Thanksgiving to MLK Day as temporary workers are added and dismissed," said Jay Morelock, an economist at FTN Financial. "As reported yesterday, Macy's is planning to lay off 2,500 workers now that the holiday season is over."
"If other companies have similar plans, these numbers will start creeping up in the weeks to come," he added. "Seasonal factors adjust for seasonal layoffs, of course, but because temporary retail hiring was stronger last year than in prior years, the layoffs will be bigger."
Friday morning, the Labor Department is scheduled to release its closely watched monthly jobs report. Economists expect the report to show an increase of about 200,000 jobs in December.
by RTT Staff Writer
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