Initial Jobless Claims Fall 16K

Jobless claims, having risen to 6-month highs and raising questions over the strength of the January labor market, fell back a sizable 16,000 in the January 23 week to a lower-than-expected 278,000. The Econoday consensus was calling for 285,000 with the low estimate at 281,000. The 4-week average is also down, 2,250 lower to a 283,000 level that continues, however, to trend slightly higher than the month-ago comparison.

Continuing claims, where data lag by a week, also rose, up a steep 49,000 in the January 16 week to 2.268 million for the highest reading since August. The 4-week average is up 15,000 to 2.246 million which is the highest reading since September. And the unemployment rate ticked higher, up 1 tenth to what is still a very low 1.7 percent.

The reporting week for initial claims was a shortened holiday week which always raises adjustment questions and takes some of the impact from the weekly decline. This, while the gain in continuing claims raises new questions over how strong the January employment report will prove.

Recent History Of This Indicator:
Initial jobless claims were expected to fall back to their favorable trend but instead burst to 293,000 for the highest reading since July. Claims again are expected to dip back, this time for the January 23 week where the Econoday consensus is 285,000. But even if claims do fall, the damage was done in the prior week which matched the sample week of the monthly employment report.