(Initial claims article updated for analyst commentary, additional information)NEW YORK ( TheStreet) -- 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 Bloomberg. 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 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 >To contact the writer of this article, click here: Shanthi Bharatwaj. >To follow the writer on Twitter, go to http://twitter.com/shavenk. >To submit a news tip, send an email to: firstname.lastname@example.org.