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(CEP News) - Following seven straight weeks above the half-million mark, initial claims for unemployment benefits dipped below that threshold during Christmas week. For the final week of 2008, economists expect a rebound in claims, yet the New Year holiday may have skewed data once again.
The consensus from 34 economists polled by Bloomberg is for 545,000 Americans to have filed for unemployment benefits in the week ending Jan. 3. That would put the weekly figure back in line with the four-week average of 552k, which was brought down last week when initial claims dropped 94k to 492k. "Given that these data cover the Christmas holiday and a period of winter storms that may have prevented people from filing, we are not reading much into this decline in jobless claims," economists from RDQ said after last week's release. Prior to that dip, which was widely dismissed as a seasonal blip, claims had hit a 26-year high with 586k people filing for unemployment benefits in a single week. A sustained weekly loss above 400,000 is considered recessionary, which suggests the labour market continues to disintegrate rapidly. TD Securities' strategist Jacqui Douglas said seasonal factors could cause the data to come in far from the consensus expectation. "The numbers around holiday periods can be very volatile, due to the difficulty with seasonal adjustment during holiday-shortened weeks, so we could easily see a large swing in either direction." In the Thanksgiving week, jobless claims came in far below expectations, but during the week of the Veterans Day holiday, claims rose above the consensus, showing the seasonal issues can work in both directions. Despite the drop in initial claims, the number of people continuing to receive benefits rose markedly to 4.506 million in last week's report, a new cyclical high. At the current pace, the record high of 4.713 million claims, reached from November 1982, is on track to be broken. By Patrick McGee,
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