Jobless claims slip back to 639,000

The number of workers filing for state unemployment benefits fell by 31,000 to a seasonally adjusted 639,000 last week, while the smoothed average of continuing claims moved higher into record territory, the Labor Department reported Thursday.

First-time claims fell back from a 26-year high of 670,000 the previous week to 639,000, likely because of difficulties adjusting for the federal Presidents Day holiday. Read the full government report.
The smoothed average of new claims over the past four weeks rose to 641,750, the highest since October 1982. The smoothed average is considered a better gauge of labor market conditions than the volatile weekly number because it smoothes out one-time distortions caused by holidays, bad weather or strikes.
Meanwhile, the number of people receiving unemployment checks in the week ending Feb. 21 dropped for the first time in seven weeks by 14,000 to a seasonally adjusted 5.11 million from a record high the previous week. The smoothed four-week average increased 76,750 to 5.01 million, a record high. The data go back to 1967.
The data come from state unemployment offices' reports on actual filings, not a statistical sample.

The report comes a day before the Labor Department reports on February nonfarm payrolls. The numbers released Thursday have no bearing on the February report because they were collected after the monthly payrolls survey.
Economists surveyed by MarketWatch expect payrolls to fall by 650,000, the worst job loss in nearly 60 years. They expect the unemployment rate to rise to 8% from 7.6%. See full story.

In a separate report, the government said companies cut their workforce drastically in the fourth quarter, but not enough to match the deep decline in output. Productivity in the nonfarm business sector fell 0.4%, while productivity in the manufacturing sector dropped a record 4%. See full story.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs. The jobless claims report shows businesses are laying off workers at a rapid pace, and finding a replacement job is ever harder for those who've lost work.
Compared with the same week a year ago, new jobless claims are up about 86%, while continuing claims are up 82%. Since the beginning of the year, new claims have risen 16% and continuing claims have risen 12%.

The insured unemployment rate - the proportion of covered workers who are receiving benefits - was steady at 3.8%, the highest in 25 years.
Typically, state unemployment benefits run out after 26 weeks for those who are eligible. A total of 1.4 million people were collecting benefits under a federal program that extends unemployment benefits.
Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.