It's good news and bad news for the U.S. labor market. First-time jobless claims were up slightly during the first week of the year, from 367,000 to 371,000 (seasonally adjusted), according to the latest release from the U.S. Department of Labor.
But even with the slight increase, economists say it isn't a sign of a declining job market. As Robert Kavic, a senior economist at BMO Capital Markets in Toronto, told Reuters earlier this week: "Jobless claims data continue to suggest steady but modest U.S. employment gains."
One of the problems with the latest round of figures, though, is the impact of the holidays on claims processing. Closed offices or limited hours shifted when initial claims could be processed, skewing weekly results. And it may take some time before that impact is no longer felt.
The latest number of initial filings is down from the same time a year ago, when 390,000 initial claims were filed in the first week. On top of that, nonfarm payroll employment rose by 155,000 in December, according to the Bureau of Labor Statistics. And the participation rate (percentage of the labor force working or seeking work) held steady, meaning the unemployment rate isn't being significantly impacted by people who have simply given up.
It's too early to say with absolute certainty what will happen in the rest of the year, and there are still several unknowns related to spending cuts that need to come out of Congress in a few months. But at least the early signs say we're not going backwards.
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