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Friday, October 11, 2013

Unemployment Initial Claims Jumped Last Week

In the week ending October 5, the advance figure for seasonally adjusted initial claims jumped to 374,000, a 21% increase from the previous week. However, it’s still low compared to 2013 trends, which has a year to date average of 344,231claims.

The unemployment initial claims, conducted by the Bureau of Labor Statistics (BLS), measures the number of initial unemployment claims under state programs. These are fairly volatile numbers, which is why more attention is paid to the 4-week moving average. Generally a four-week moving average below 400,000 represents an improving labor market. Despite the large jump in claims, they are still well below the 400,000 mark.

Due to the sharp increase, the 4-week moving average increased by 20,000 to 325,000. Since the government shutdown prevented a jobs report release last Friday, the increased claims shed light on what could be weaker job growth in the fall.

According to the Labor Department, the jump reflects roughly 15,000 private-sector layoffs related to the partial government shutdown. Federal furloughed workers are not eligible for benefits if they receive back pay, which was approved.

The Federal Reserve is likely looking at the report too as it decides when to begin tapering.

Read the BLS release.

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