Initial jobless claims fall 19,000 to 234,000, return near postrecession lows

Bloomberg News/Landov

Strong hiring in January indicates the U.S. labor market is still on fire.

The numbers: The number of people who applied for jobless benefits in early February fell back toward recent postrecession lows after a holiday-related spike pushed them to a 16-month high at the end of last month.

Initial jobless claims, a rough way to measure layoffs, declined by 19,000 to a seasonally adjusted 234,000 in the seven days ended Feb. 2, the government said Thursday.

Economists polled by MarketWatch had forecast a 225,000 reading.

The more stable monthly average of new claims, meanwhile, rose by 4,500 to a two-month high of 224,750. They are still near historically low levels, however.

The number of people already collecting unemployment benefits, known as continuing claims, dropped by 42,000 to 1.74 million. They stood at 1.91 million a year earlier.

What happened: Jobless claims are often herky-jerky during and after the holiday shopping season, a time when many companies take on and then let go lots of temporary employees.

The government tries to adjust the weekly figures for season variations, but sometimes its estimate are way off. New claims have gone from a 50-year low of 200,000, for instance, to a 16-month high of 253,000 in a span of just two weeks.

The raw or unadjusted claims figures, by contrast, show very little change over the past month.

Economists say to ignore the noise: Layoffs are still very low and the labor market is strong by virtually every measure.

Big picture: The economy appears to have slowed since last fall, but it’s hard to tell from the rapid pace of hiring. The U.S. created a surprisingly large 304,000 new jobs in January to kick the new year off in fine fashion.

As long as the economy keeps producing jobs and unemployment remains low, the U.S. is likely to keep growing and break the record for longest expansion ever. The current expansion will turn 10 years old in June and is on track to set a new record this summer.

Market reaction: The Dow Jones Industrial Average

DJIA, -0.08%

and S&P 500

SPX, -0.22%

were set to open lower in Thursday trades. Stocks have rallied since the start of the year, however, recording big gains in January after a huge slump in December.

The 10-year Treasury yield

TMUBMUSD10Y, -1.33%

slipped to 2.67%. Yields are much lower compared to late last year, when they hit a seven-year high of 3.23%.

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