Unemployment Benefits Claims Numbers Sink to Half-Decade Low

Americans applying for unemployment benefits plunged to a five-year low during the week ending January 12 though much of the fall in claimants is thought to have arisen due to seasonal flux. For the week, applications feel by 37,000 to reach 335,000, the lowest since January 2008. The four-week average also fell to 359,250.

The variable applications data for January usually spikes during the second week of the month as companies unload temporary workers hired on for the holiday season. But the U.S. Department of Labor has reported that layoffs were still lower than expected. Applications were also declining at the end of December to a four-year, four-week average low. Recent trends suggest that the job market is improving.

In December, employers added 155,000 jobs suggesting employers avoided a decrease in hiring, bucking predictions that hiring would fall due to concerns over the fiscal cliff. Over 5.8 million people received unemployment benefits during the last week of December, including around 2 million people receiving extended federal benefits, about 465,000 more than the prior week. The economy grew at an annual rate of 3.1 percent during Q3 2012 but it is believed that that economic growth slowed considerably during Q4; more than likely less than 2 percent due partly to companies cutting back on restocking.