Fewer than 435,000 Americans filed for first-time unemployment claims last week, the second week in a row that claims have been this low in more than a year.
The trend suggests that the economy is nearing the point when job growth will outstrip job loss in the US economy. But economists are cautious about the report released Thursday by the US Department of Labor because of the enormous variation between the seasonally adjusted and unadjusted numbers.
For the week ended Jan. 2, 434,000 Americans filed for first-time benefits (a sign they've just lost a job). That was up only 1,000 from the week before, when counted on a seasonally adjusted basis and economists had been expecting a rise to 440,000.
But because unemployment tends to peak around this time, government statisticians smooth this data so that the numbers can be compared week to week. In actuality, nearly 646,000 Americans filed for benefits last week, according to the unadjusted data.
"There is still a good chance that seasonal adjustment distortions will cause some volatility in coming weeks," warns Joshua Shapiro, economist at MFR Inc., in a written analysis. "Normally, these are ironed out by late January."
Still, the numbers are far better than a year ago, when nearly 490,000 filed for benefits, seasonally adjusted. And the last two weeks have seen the lowest seasonally adjusted numbers since late August 2008, before the financial panic took hold of markets and companies began making big cuts.