U.S. initial jobless claims fall, but remain above Fed's ceiling

Initial jobless claims fell to 356,000 to for the week ended February 2 from the previous week, but came in above the 344,000 consensus estimate, the U.S. Labor Department announced Thursday. Claims for the previous week were revised up 3,000 to 378,000.

Also, the four-week moving average jumped 11,000 to 335,000. Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

The largest increases in initial claims for the week ending Jan. 26 were in Wisconsin, +2,325; North Carolina, +715; Maryland, +504; Virginia, +340, and California, +233. The largest decreases were in Michigan, -7,546; Illinois, -4,483; Florida, -4,127; Ohio, -3,038; and Texas, -2887.

Meanwhile, the number of continuing claims increased by 75,000 to 2.785 million from a revised 2.710 million for the week ended January 26, the latest period for which figures were available.

Economic Analysis: Another poor weekly jobless claims statistic, one that continues to show a deterioration in employment conditions. Further, the four-week moving average continues to rise and is approaching the U.S. Federal Reserve's danger zone of 350,000. The U.S. Federal Reserve considers a four-week average above 350,000 a signal of soft labor market conditions. In addition, the rise in continuing claims, which measures the seasonally-adjusted uninsured, to 2.785 million, also indicates a tepid job market. If jobless conditions continue to worsen, additional monetary and fiscal measures undoubtedly will be needed to stimulate the U.S. economy.