According to a new report from the Labor Department, the number of people filing initial claims for state unemployment benefits fell to a seasonally-adjusted 432,000 in the week ended Dec. 26. This drop of 22,000 people is the lowest the Labor Department has seen since the summer of 2008 and is lower than economists predicted.
What’s With the Seasonal Adjustment?
You may be wondering what it means exactly when you see that the jobless claims have been seasonally adjusted. Why not just give exact numbers? Well, seasonal adjustments help to smooth out month-to-month or even week-to-week data that could be heavily affected by outside factors like bad weather or holidays.
Some people may not head over to the unemployment office in bad weather – or may even be out of town for the holidays – so to account for these outside factors, the data is averaged out and seasonally adjusted just in case there are sharp increases or decreases in data.
Stats on Continuing Claims
The report provided a few additional details about those who have been collecting state benefits for an extended period of time, also known as continuing claims:
- Week ended Dec. 19: The number of people making continuing claims decreased 57,000 to 4.98 million in the week ended Dec. 19.
- Four-week average of continuing claims: The four-week average of continuing claims dropped 122,000 to 5.22 million, which is the lowest rate since March 2009.
Is Unemployment Still a Big Problem?
If you’re wondering whether the declines in initial and continuing claims mean the problem of unemployment is decreasing, you may as well wonder if one less hurricane means hurricanes still aren’t problems. The fact is that while there has been a gradual decline in the number of people receiving benefits, there are many others who are out of work, haven’t reported it or simply are no longer eligible for benefits yet don’t have a job.
In Dec. 2009, the unemployment rate still stood at 10% and very few economists expect this number to decline soon. So while it looks like we’re moving in a better direction, it seems that we still have a long road ahead of as we wait for a true unemployment reversal.
Are you optimistic about the jobless claims numbers?