Drop in jobless claims may be related to special factors

A drop in weekly jobless claims to the lowest reading in nearly three months would normally be welcome news, not just for job seekers and those worried about layoffs, but Fed Chairman Ben Bernanke, who surprised the markets yesterday with talk that another round of easing is being considered.

But special factors may have played a role.

Weekly initial jobless claims fell 22,000 in the latest week to 405,000, matching the Bloomberg forecast. The 4-week moving average dipped 3,750 to 423,250, while continuing claims edged up 15,000 to 3.73 million.



What might normally be greeted favorably must be looked at somewhat skeptically.

Seasonality is taken into account each week by the Department of Labor but adjustments sometimes get a bit tricky following a major holiday weekend.

Additionally, the timing of auto shutdowns for re-tooling, which takes place each year at about this time, can also skew the data, Bloomberg News pointed out.

Or course, the decent-sized drop is welcome, but let’s wait a couple of weeks and see how this plays out before stating that the downward trend we saw earlier in the year has reasserted itself.