WASHINGTON (1/27/14)--The latest Labor Department report on jobless claims indicates that the economy is in marginally better shape after the holiday season.
Jobless claims rose for the first time in three weeks by 1,000 to 326,000 for the week ending Jan. 18, according to data published Friday. The claim washed out a downward revision of the previous week's figure, which was also initially reported as 326,000.
But between December and January reference periods--defined by the Bureau of Labor Statistics as the week with the 12th day of the month--initial claims fell by 54,000 and the four-week moving average of the statistic was down 12,250 (Economy.com Jan. 24). Weekly data during the holiday period is notoriously unreliable.
Moody's expected the number of initial claims reported, while the median prediction in a survey of 50 economists conducted by Bloomberg forecast that claims would rise to 330,000 (Bloomberg.com Jan. 24).
The four-week moving average of initial claims fell 3,750 to 331,500, and continuing claims for the week ending Jan. 11 were up 34,000 to 3.1 million. A four-week moving average of continuing claims rose 31,000 to 2.9 million.
Bloomberg reported that the numbers for only one state and the District of Columbia were estimated. States with the largest increases in initial claims for the week ending Jan. 11 were Texas, California, Pennsylvania, Indiana and Florida. States with the largest decreases that week were New York, Georgia, Wisconsin, Alabama and South Carolina.
Friday's report was the first that accounts for the 1.35 million people who lost emergency unemployment benefits Dec. 28. Earlier this month, Republicans declined to approve a plan that would have extended the program, which, at the end of 2013 provided a maximum of 73 weeks of benefits.
Moody's said that January's report on payroll gains should be much better than December's, which initially reported a gain of 74,000--a net loss of 60,000 jobs last month can be explained by cold weather, the ratings and research firm said. It still expects hires to increase by 200,000 per month in 2014. Bloomberg also expects monthly payroll gains to increase by 200,000 this year.
Expectations for increased hiring in 2014 have informed the Federal Reserve's decision to rein in its quantitative easing program. Earlier this month, it started buying $75 billion worth of bonds every month, down from $85 billion.
Fed policy makers are set to meet this week in Washington.