The Labor Department reported that initial applications for unemployment insurance dropped by 24,000 to a seasonally adjusted 467,000 for the week ending Jan. 3. Wall Street economists expected initial claims to increase to 540,000. The figure partly reflects seasonal volatility that occurs around the New Year's holiday.
The four-week average of initial claims, which smooths out fluctuations, fell by 27,000 to 525,750.
But the number of people continuing to claim jobless benefits jumped unexpectedly by 101,000 to 4.61 million. That was above analysts' expectations of 4.5 million and the highest level since November 1982.
The high level of ongoing claims indicates that laid off workers are having a harder time finding new jobs.
Last week was the second in a row that claims have come in below 500,000, after seven weeks above that level.
Still, the improvement could be temporary. Three states said earlier this week that their online and phone filing systems for unemployment benefits crashed due to the heavy volume of first-time filers. The impact of that volume won't be seen until next week's data.
And companies have resumed mass layoffs after a brief respite over the holidays. This week alone, insurance provider Cigna Corp., aluminum producer Alcoa Inc., data-storage company EMC Corp. and computer products maker Logitech International have announced large job cuts.
http://accesswdun.com/article/2009/1/216629