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First Cut: Initial jobless claims drop to lowest in over 49 years

The long tease is over. Initial jobless claims broke below the 200,000-mark in the January 19 week at 199,000, down 13,000 from the 212,000 in the prior week (previously 213,000). This was the lowest since 197,000 in the November 15, 1969 week. While some of this may be attributable to a seasonal adjustment factor that anticipated higher levels of new claims as the post-holiday layoff period winds down, it is also simply that the tight labor market and continued economic expansion is resulting in fewer layoffs overall.  Starting next week, seasonal adjustment factors are much smaller and for normal conditions. It is likely the level will return to the low 200,000’s then.

The Labor Department cited no special factors behind the number. Six states estimated claims – California, Hawaii, Kansas, North Dakota, Virginia, and West Virginia. Such estimates are usually fairly accurate and should not result in major revisions to the January 19 week data.

Continuing claims levels declined 24,000 to 1.713 million in the January 12 week as workers found new jobs or were able to return to previous jobs after temporary layoffs during the holiday period, or from closures related to natural disasters. The insured rate of unemployment remained at 1.2% for an eighth straight week.

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