Initial Claims Drop More than Expected

NEW YORK ( TheStreet) -- The number of Americans filing unemployment claims dropped significantly last week, the Labor Department said early Thursday.

The advance figure for seasonally adjusted initial claims decreased by 37,000 to 404,000 in the week ended Jan.15 after rising to 445,000 in the previous week. Economists were expecting initial claims to drop to 425,000, according to consensus estimates from Briefing.com. Estimates ranged from 397,000 to 435,000, according to Bloomberg.

The number of Americans filing continuing claims -- those who have been receiving unemployment insurance for at least a week -- came in lower than expected at 3.86 million for the week ended Jan.8, a decrease of 26,000 from the previous week's revised figure of 3.887 million. Consensus estimates projected continuing claims to rise slightly to 3.9 million from 3.87 million reported the previous week.

The four-week moving average in initial claims, which smoothes the volatility in week-to-week reports, was 411,750, a decrease of 4,000 from the previous week's revised average of 415,750. The four-week moving average in continuing claims was 4 million, a decrease of 52,250 from the preceding week's revised average of 4.05 million.

The advance seasonally adjusted insured unemployment rate was 3.1% for the week ending Jan.8, unchanged from the previous week.

The SPDR Dow Jones Industrial Average ETF ( DIA) was down 0.2%, the SPDR S&P 500 ETF ( SPY) was down 0.3% and the PowerShares QQQ ( QQQQ) was down 0.4% in premarket trading.

Jobless claims numbers unexpectedly rose last week. Claims data tend to be erratic in the first couple of weeks of January as a backlog of claims tend to be built up during the holidays. Claimants also postpone filing during the holiday, which could reflect in an increase in filings.

Jobless claims have been on a downward trend over the last several months, as layoffs show a sign of slowing down. Hiring, however, has yet to pick up significantly.

-- Written by Shanthi Bharatwaj in New York

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