“We do have to discount the heightened volatility we have around this time of the year”, said Mr. Mike Englund, chief economist at Action Economics in Boulder, Colorado, who correctly projected the jump.
“Over the past 12 months, the number of people receiving benefits has fallen 7.1 percent to 2.2 million”.
According to the report, claims overall have held below 300,000 since early March amid moderate economic growth and steady job creation that pushed the unemployment rate to 5% in November, a seven-year low.
Many analysts believe that the reports made many believe that the Federal Reserve might not hike interest rates any time soon which is a huge positive for equity and credit markets. Part of the reason is the strong job market improvement. Still, this included the Christmas week, and there are many companies that brought in full-time people on a temporary basis. These data are reported with a one-week lag. In short, the low-hanging fruit has been picked, or so today’s numbers imply.
Information released Thursday by the U.S. Labor Department showed initial claims for state unemployment benefits rose 20,000 to a seasonally-adjusted 287,000 for the week ended December 26.
The Labor Department stated that the increase in jobless claims may be due to seasonal variation that cause volatility.
The number of Americans filing new claims for unemployment benefit increase sharply during the holiday week, reaching the highest level since July this year. It is unlikely that the big jump in weekly jobless claims will take much of that blame by the end of the day. It is imperative to state that the applications have been the highest level since July.
