Initial claims for jobless benefits fell by the largest amount in nearly a year in the week ending Jan. 15, reversing a sharp, seasonally affected spike in claims during the previous week, according to Reuters. On Thursday, the Labor Department reported that the number of Americans seeking first-time unemployment benefits dropped by 37,000 to reach a seasonally adjusted level of 441,000, which is the biggest weekly jump since Feb. 6, 2010. The drop was roughly double the decline that analysts had been anticipating.
The reversal of the big surge in claims during the week ending Jan. 8 was explained by an official as being the result of a return to normal after a holiday backlog, and brought the four-week average for new claims down by 4,000 to 411,750. Christopher Low of FTN Financial said, “The trend of the last three months is clearly downward,” which he said indicated, “The pace of layoffs is clearly lower.” However, with the jobless rate hovering at 9.4%, even the latest strong jobless claims report cannot mask that “hirings are still frustratingly slow.”