Unemployment claims drop to lowest level in five years

Initial claims for unemployment insurance dropped by 37,000 to 335,000 in the week ending January 12, their lowest level in five years. Low is good, obviously, but in this case, don't get too excited, because:

... it is probably not the start of a new trend or a sign of a material shift in labor market conditions as claims tend to be very volatile around this time of the year.

This is because of large swings in the model used by the department to iron out seasonal fluctuations.

The previous week's total was revised upward by 1,000, to 372,000. The four-week moving average, a measure that smooths out the volatility we see week to week, was 359,250, dropping by 6,750.