According to a March 22 press release from the United States Department of Labor (DOL), the number of initial jobless claims hit a four-year low last week, suggesting that the labor market may be showing signs of improvement. Despite the positive news, however, long-term unemployment continues to be a concern.
The number of new (initial) claims for unemployment benefits is considered a strong indicator of the direction of the labor market. According to the Department of Labor release, the advanced figure number of initial claims for state benefits declined last week to 348,000 (adjusted for seasonal variation). This is a 5000 decline from the revised figures from the previous week and reflects the lowest number of initial claims for unemployment since February of 2008. The prior weeks figure was revised upward in this report from a previously reported 351,000 to 353,000.
The four-week moving average for initially claims, often considered to be a better measure of trends in the labor market, also indicated positive news, declining from the previous week’s revised average of 356,250 down to 355,000. Claims data from non-farm payrolls also dropped 5,000 between February and March, declining by 5,000 and adding to the positive news.
Improvements are not limited to new claims data either. Employers added a total of 227,000 jobs during the February period, and the DOL reported that the number of Americans earning both unemployment under regular state programs and obtaining emergency unemployment benefits dropped. The most recent available data demonstrated that the number of people receiving regular benefits declined by 9,000 to 3.35 million in the week ending March 10, and the number receiving emergency unemployment benefits dropped 24,312 to 2.85 million in the week ending March 3. This brings the number of people receiving regular benefits down to the lowest levels since August of 2008.
However, despite this positive news and the indicators that the job market is continuing to grow, long-term unemployment is still a significant concern. Of the 12.8 million Americans unemployed in February, approximately 48 percent had been out of work for more than six months.
As the job market continues to improve, there is hope that the long-term unemployment situation will get better as well. The Federal Reserve has indicated that they expect jobless rate to gradually decline, and these newest figures from the Department of Labor suggest that this prediction is proving correct- at least for now.