Jobless Claims Jump, Reverse Four-Week Decline
The U.S. Bureau of Labor Statistics reports that the number of Americans applying for unemployment benefits jumped by 17,000 for the week ending December 15, the first increase in nearly a month. However, the number of people seeking aid remains amendable to a job market in the midst of modest growth. Claims rose to an adjusted 361,000 over while the four-week moving average fell 13,750 to 367,750, the lowest in two months.
This decline in the four-week average suggests that companies are not ramping up layoffs in advance of the potential “fiscal cliff” set to arrive in January should Congress fail to reach a budget agreement. An agreement seems to be in the works but legislators are still arguing over how to handle the issue of raising taxes on the country’s highest earners. Even granting that an agreement is met and the cliff avoided, economists aren’t expecting significant economic progress in 2013.
“The steady improvement in weekly claims won’t matter one bit if the economy enters the new year with fiscal cliff-induced uncertainty,” Dan Greenhaus, chief global strategist at BTIG LLC, wrote in a note to clients. “Claims will shoot higher as businesses shift staffing levels in front of an anticipated drop in demand during the beginning of next year.”
The economy is reported to have grown at an annual 3.1 percent rate during Q3 2012, considerably better than expected and a full percent higher than the 2.1 percent rate that is grew throughout the first nine months of the year. Economists expect the economy to grow at a 2.1 percent rate next year while unemployment is predicted to remain at a high, but steady, 7.7 percent.