Initial Jobless Claims Fall More Than Expected

By John S. McClenahen Last week, first-time claims for unemployment insurance fell to 336,000, a decline of 11,000 from the previous week's revised figure of 347,000, the U.S. Labor Department reported on August 5. Economists generally expected a small decline, to about 340,000. In contrast, the department's four-week moving average for initial claims, a measure that smoothes out week-to-week changes and which many economists consider to be a better indicator of labor market conditions, edged up a bit last week. The average was 343,500 claims, some 6,750 more than the previous week's revised average of 336,750. However, the increase does not worry Kathy Bostjancic, a senior economist at Merrill Lynch & Co., New York. She explains that last week's increase in the average came as an abnormally low figure from early July fell out of the calculation. "That week's figure was heavily skewed downward due to the closing of the unemployment offices during ex-President Reagan's funeral," she notes.