New claims for unemployment benefits fell to a 29-month low this week, but the improvement is probably not as good as it seems.
Initial claims fell to 388,000, down 34,000, and below the 415,000 expected by economists for the week ended Dec. 25.
"I think the numbers are distorted," said Deutsche Bank economist Joseph LaVorgna.
"If you looked at the trend in December, claims tend to fall through the month."
"If you look at where we were at the beginning of the month, we fell 11 percent this year. Last year, we were down more than 16 percent," he said.
Claims in the prior week were revised up to 422,000 from 420,000, and the important four-week average continues to decline, falling to 12,500 to 414,000, the lowest since the week of July 26, 2008.
Economists say the seasonal factors of the year-end holidays can make the claims numbers volatile. LaVorgna said a factor in this week's number could also be weather. "There's some seasonality with conceivably, inclement weather fed into it," he said.
"You'll see this thing is back up next week. We would love to tell you the number is real. I've been looking for a sub-400,000 number for some time," he said. "I think you need to see another few readings. This time of year, a lot of these reports are weather reports."
Questions? Comments? Email us at marketinsider@cnbc.com
