U.S. Initial Jobless Claims Fall More than Expected in Latest Week

Initial unemployment insurance claims fell 37,000 to 404,000 for the
week-ending January 15, 2011, thereby more than reversing the previous
week's 30,000 jump to a revised 441,000 level (initially reported as
445,000) the previous week. The improvement in the latest week was
larger than market expectations for claims to fall to a 420,000 level.
The four-week moving average of initial claims, which normally
provides a better indication of the underlying trend in labour
markets, slipped to 411,750 from 415,750 the prior week. Continuing
claims (for the week ending January 8, 2011) dropped 26,000 to
3,861,000 from 3,887,000 last week.

The dip in initial claims in the latest week, which happens to
coincide with the payroll employment survey week for January 2011,
reaffirms the view that last week's unexpectedly large increase may
have been related to difficulties in seasonally adjusting the data
during the holiday season. As well, the four-week moving average of
claims, which better controls for seasonal distortions, remains below
its 426,000 level in the December 2010 payroll survey week, suggesting
that the improving trend in layoffs during the past few months remains
intact. While the improvement in the claim numbers has yet to be
reflected in significantly stronger net job growth, the downward trend
in layoffs continues to bode well for the labour markets to continue
to improve, albeit likely still at a moderate pace in the near term.
Source: ActionForex.Com