U.S. initial claims dropped 25,000 to 370,000 in the week ending December 1, marking the third consecutive sizable monthly decline following 21,000 and 35,000 drops the weeks of November 24 and 17, respectively. The cumulative 81,000 decline over the three weeks retraced much of the outsized 90,000 gain the week of November 10 that was largely blamed on disruptions caused by Hurricane Sandy at the end of October.
Difficulties seasonally adjusting the data around the Thanksgiving holiday and Veterans' Day likely also had an impact on claims later in the month. Difficulties seasonally adjusting the data around the Thanksgiving holiday may still be having some effect; however, the latest weekly reading likely provides a better indication of the underlying pace of layoffs outside of temporary distortions.
Despite the drop in the last few weeks, the four-week moving average of initial claims climbed for a fifth consecutive week, rising to 408,000 from 405,750 the previous week reflecting the earlier upward pressure. Continuing claims dropped 100,000 to 3,205,000 in the week ending November 24.
