(Initial claims article updated for analyst commentary, additional information)
NEW YORK (
) -- The number of Americans filing unemployment claims unexpectedly rose last week, the Labor Department said early Thursday.
The advance figure for seasonally adjusted initial claims increased by 35,000 to 445,000 in the week ended Jan.8, the highest level since October. Economists were expecting initial claims to drop to 405,000, according to consensus estimates from
Estimates ranged from 400,000 to 415,000.
The number of Americans filing continuing claims -- those who have been receiving unemployment insurance for at least a week -- came in significantly lower than expected at 3.87 million for the week ended Jan.1, a decrease of 248,000 from the previous week's revised figure of 4.12 million. Consensus estimates projected continuing claims to drop to 4.08 million from 4.10 million the previous week. The level of continuing claims was the lowest since November 2008.
The four-week moving average in initial claims, which smoothes the volatility in week-to-week reports, was 416,500, an increase of 5,500 from the previous week's revised average of 411,000. The four-week moving average in continuing claims was 4.05 million, a decrease of 72,000 from the preceding week's revised average of 4.056 million.
The claims numbers do not include millions of those who claim benefits under the extended unemployment benefits program. Total number of people claiming benefits in all programs for the week ended Dec.25 was 9.2 million. That is down from nearly 15 million at the peak in 2009.
The advance seasonally adjusted insured unemployment rate was 3.1% for the week ending Jan.1, a drop from the previous week's level of 3.3%.
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was down 0.05% and the
were up marginally in morning trades.
John Canally, economist at LPL Financial, said the initial claims data often tends to be wonky during the first weeks of the year, as holidays tend to disrupt data collection.
"There is a chance
the job market could have deteriorated in the last week, but it's hard to get a clean read at this time of the year. I would have been just as skeptical if the claims had fallen to 350,000," said Canally. "Overall the trend is down. Household employment data shows there is not a lot of firing but not more hiring."
The 4-week moving average in initial claims rose last week but has been trending downward, a sign that layoffs are beginning to slow. Initial claims should, however, trend below 400,000 over the next several weeks for further proof of a bottoming in layoffs.
The market will in the coming weeks pay greater attention to continuing claims data. A significant decrease in continuing claims could point to a pickup in hiring. An overall downtrend in the total people claiming benefits across all programs might also point to better trends in jobs.
The economy added only 103,000 jobs in December, disappointing expectations for a stronger recovery in the jobs market.
Economists say that 150,000 jobs need to be created every month just to keep pace with population growth. The economy needs to add 200,000 to 300,000 jobs for a strong recovery in the economy.
The unemployment rate fell unexpectedly to 9.4% in December, partly because more people dropped out of the workforce.
Companies are yet to start hiring in a meaningful way, with the number of job openings falling by 80,000 in the month of November according to latest monthly Job Openings and Labor Turnover Survey.
Canally notes that loans to small businesses will help boost job creation. "Small businesses need financing to hire. A bigger pickup in bank lending is needed to lead to a pickup in hiring."
-- Written by Shanthi Bharatwaj in New York
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