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Local observers warn against seeing trend in jobless claims rise

WASHINGTON -- Applications for weekly unemployment benefits spiked nationwide last week, largely because companies shed thousands of workers after the holiday season.

But the same Labor Department report showed noticeably fewer first-time claims in Nevada during the holiday season. The Silver State posted one of the biggest declines in benefit applications in the week ending Dec. 24, with 1,590 fewer aid requests than in the prior week. The agency said claims dropped because Nevada reported fewer layoffs over the holiday.

Local observers warned against reading too much into a volatile statistic that can fluctuate dramatically from week to week.

Going back to early December, Nevada's number of benefits claims seesawed, including a higher-than-average jump of nearly 2,000 applications in the week ending Dec. 3, and a steep decline of 1,340 in the week ending Dec. 10, after fewer seasonal, post-Thanksgiving layoffs.

"It's like watching NBA basketball. It's so hard to draw a trend," said Steve Brown, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas.

And any drop in Nevada layoffs likely came partly because local businesses hired fewer workers in the first place, Brown added.

"Going into the holidays in Las Vegas, there was some hiring, but it was still conservative," he said. "A lot of retailers haven't been hiring at the same level as their sales volumes have been growing."

Brown said preliminary evidence shows retail spending held up better over the holidays in Las Vegas than nationally, another possible factor behind slower-than-average claims here toward 2011's end.

Brian Gordon, a principal in local research firm Applied Analysis, noted that the week between Christmas and New Year's is one of the busiest in the leisure and hospitality sector. Most hotel-casino operators and retailers were staffed up in the week to accommodate business.

He also said local businesses have been operating efficiently, with fewer staffers than they had before the recession, so layoffs may not have been as necessary here.

Nationally, weekly applications rose by 24,000 to a seasonally adjusted 399,000, the Labor Department said Thursday. That's the highest level in six weeks.

Economists said such a jump is typical in early January and downplayed the increase. It followed three months of steady declines that brought applications to their lowest level in more than three years. And weekly unemployment claims have been below 400,000 in nine of the past 10 weeks.

That's a "clear indication that the pace of layoffs has slowed," Insight Economics chief economist Steven Wood said.

Applications typically soar in the first two weeks of the year because many companies lay off temporary workers who were brought on to help during the holidays. The department tries to adjust for those patterns. But the task is hard because the data can be volatile.

The four-week average, which attempts to smooth such fluctuations, also rose, to 381,750. It had fallen in the previous week to a three-and-a-half-year low.

When applications consistently drop below 375,000, it generally signals that hiring is strong enough to reduce the unemployment rate. Before last week's spike, applications had been below 375,000 for three of the past four weeks.

Las Vegas Review-Journal reporter Jennifer Robison contributed to this report.

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