–Biggest Weekly Drop Since 2005
–Analyst Said 6 States Estimated, 2 From the State Itself
–Previous Week Revised up to 402,000 Level

By Denny Gulino

WASHINGTON (MNI) – Initial claims for U.S. state unemployment
benefits fell an unexpectedly large amount, dropping 50,000 to 352,000
in the Jan. 7 week after seasonal adjustment, part of the early-year
volatility in the claims numbers that begins to fade at the end of the
month, the Labor Department reported Thursday.

Economists surveyed by Market News International had expected
initial claims to come in at 380,000, down 19,000 from the originally
reported 399,000 level that was revised upward.

A Labor Department analyst said the week’s drop was the largest
since 2005, when in the Sept. 24 week the level dropped 65,000.

The analyst said that following the September through December
period of low volatility in the underlying numbers, the weekly
fluctuations, with holidays intervening, always increase until late
January or early February and the four-week average is usually a better
guide to the trend. The latest four-week average was 379,000, down 3,500
from the previous week after adjustment.

He said California and Virginia sent in full-week estimates and
headquarters estimated Arizona, the District of Columbia, Puerto Rico
and Hawaii.

The previous week was revised up 3,000 to 402,000, the first week
above 400,000 since the Nov. 5 period. The Labor analyst repeated what
he had said last week, that the not-seasonally-adjusted numbers usually
reach their peak for the year in that first week of January.

In the latest week the seasonal factors expected a mild decline of
8% or 51,800 and instead got an unusually large 120,600 drop in the
unadjusted numbers, or 19.3%.

The state data released for the Jan. 7 week showed unadusted
initial claims increased increased in 37 states and decreased in 16.

Continuing claims declined by 215,000 to 3,432,000 in the Jan. 7
week after adjustment. The four-week moving average for continuing
claims declined 34,000 to 3,576,250.

Unadjusted claims fell by 124,606 to 521,613 in the Jan. 14 week,
compared to 549,688 claims a year earlier.

The seasonally adjusted insured unemployment rate slipped to 2.7%
in the Jan. 7 week, down two tenths from the week before. The unadjusted
unemployment rate was 3.2%, down one tenth.

The unemployment rate among the insured labor force is well below
that reported monthly by the Labor Department because claims are
approved for the most part only for job losers, not the job leavers and
labor force reentrants included in the monthly report.

The Labor Department said that the level of unadjusted Emergency
Unemployment Compensation benefits claims rose 100,179 to 3,026,855 in
the Dec. 31 week. Extended benefits claims rose by 4,988 to 533,171 in
that week.

The Labor Department reported that a total of 7,826,665 persons
claimed unemployment benefits in the December 31 week, a rise of 493,566
from the previous week, but still well below the 9,648,514 persons in
the comparable week a year ago. These data are not seasonally adjusted,
and include regular state claims, federal employee claims, new veterans
claims, the EUC and extended benefits programs, state additional
benefits, and STC/Workshare claims.

** Market News International Washington Bureau: 202-371-2121 **

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