Thursday morning, the Labor Department released its report on first-time claims for unemployment benefits in the week ended December 26th, showing that initial jobless claims unexpectedly fell for the week, once again falling to their lowest level in well over a year.
The report showed that jobless claims fell to 432,000 from the previous week's revised figure of 454,000. The decrease came as a surprise to economists, who had expected jobless claims to edge up to 460,000 from the 452,000 originally reported for the previous week.
With the unexpected decrease, jobless claims extended the downward trend seen over the past few months, falling to their lowest level since coming at 413,000 in the week ended July 19th, 2008.
The less volatile four-week moving average also continued to decline for the seventeenth consecutive week, falling to 460,250 from the previous week's revised average of 465,750.
Continuing claims, which measure the number of people receiving ongoing unemployment help, also continued to decline, falling to 4.981 million in the week ended December 19th from the preceding week's revised level of 5.038 million.
While Peter Boockvar, equity strategist for Miller Tabak, said that the unexpected drop in weekly jobless claims is a clear positive, he noted that seasonal factors wreck havoc with the data this time of the year.
He added, "With that said, a slower rate of firing theme is still very much intact."
However, Boockvar said the pace of hiring is still very uncertain, as emergency unemployment compensation benefits in the week ended December 12th rose by about 192,000 to 4.449 million and those receiving extended benefits rose by about 7,500.
Next Friday, the Labor Department is scheduled to release its report on the employment situation in the month of December. Economists expect non-farm payroll employment to be nearly flat, while the unemployment rate is expected to remain unchanged at 10.0 percent.
The November employment report showed that non-farm payrolls edged down by 11,000 in November, while most economists had expected a decline of at least 100,000. The unemployment rate also unexpectedly dipped to 10.0 percent.
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