Initial Jobless Claims Trending Towards New Low

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.

• Good news for the job market: initial unemployment insurance claims for the week ending January 19 fell by 5,000 from the previous week’s level to hit a new low of 330,000, the lowest since March 2008.  Initial claims for unemployment insurance now appear headed towards the typical levels seen before the economic downturn.

• The insured unemployment claims also fell to 3.157 million for the week ending January 12 from the previous week’s level of 3.228 million. A drop in the number of the insured unemployed indicates either fewer unemployed or fewer eligible claimants because they have exhausted the maximum number of weeks to claim unemployment insurance.

• The jobless claims data point to an improving job market. However, measures to keep the fiscal deficit on a more sustainable path will continue to impact on the pace of economic recovery. Under this scenario, NAR expects the economy to grow at a modest pace of 2.3 percent in 2013 which will generate 1.4 million net new non-farm payroll jobs. The gains in employment, coupled with continued low interest rate and improving house prices, can sustain 5.08 million of existing home sales.