Weekly jobless claims tumble

The holidays at the end of the year normally render the weekly jobless claims data a bit suspect, even with the seasonal adjustments that always accompany the release.

But we are now starting to make some headway into the new year, and the latest release is starting to provide some clarity on the labor market.  Fortunately, there’s good news to report.

Weekly initial jobless claims tumbled 37,000 to 404,000, while the 4-week moving average slipped a solid 4,000 to 411,750.



Though still elevated, the dip to near 400,000 is a sign the labor market is slowly on the mend. It also suggests that business activity is picking up, reducing the unfortunate necessity for layoffs.

I’ll be looking for claims to consistently fall below 400,000, which would be a strong indication that the acceleration in economic activity that began in Q3 is continuing into 2011.