Initial Jobless Claims Drop to Lowest Since Great Recession

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses unemployment insurance claims.

• Initial unemployment insurance claims for the week ending January 12 were at their lowest since March 2008.  Initial claims dipped to 355,000, dropping by 17,000 from the previous week’s level. To note, the data is preliminary and data is generally revised upwards. State reports for the reference week are not available but reports for the week ending January 5 indicate that the lower layoffs in construction, manufacturing, transportation, warehousing, and educational services may have carried into the succeeding week.

• Meanwhile, for the week ending January 5, there were 3.214 million unemployed filing claims for the second week or more.  This is considerably down from about 4 million continued claims during a comparable period in 2011, and from the peak of about 6 million. A drop in the number of continued claims represents either the unemployed who no longer filed a claim because they have found work or those who have exhausted the maximum number of weeks to claim regular and extended benefits. Under the “fiscal cliff” deal, Congress extended the funding for the federally funded extended benefits, which would have expired January 2, 2012, for another year.

• In 2013, NAR expects the economy to generate about 2 million jobs which will keep the unemployment rate to about 7.8 percent. The gains in employment, coupled with continued low interest rate and improving house prices, can sustain 5.08 million of existing home sales.