The year’s economic news is ending on a high note, or at least a relatively encouraging note. Initial jobless claims declined by a hefty 34,000 last week to a seasonally adjusted total of 388,000. That’s the first reading under 400,000 since the summer of 2008. Is it real? Maybe, although the timing raises some doubts.

Does Christmas week provide a robust sampling of new jobless claims? No, probably not, although the fact that new claims have been trending down in recent months suggests there’s a favorable wind blowing here, even if last week’s data point is skewed.

Last week’s tumble in new claims raises hope that next week’s employment report for December (scheduled for release on Friday, January 7) will offer some confirmation that the job market is improving. If you’re an optimist, you can argue that the outlook is moderately favorable at the moment. The consensus forecast among economists calls for a rise in private nonfarm payrolls of 101,000 for December. But even assuming that’s an accurate forecast, it still falls well short of what’s needed to bring the elevated 9.8% unemployment rate down by something more than a trivial degree.
Of course, a 101,000 gain in private payrolls would be a step in the right direction compared with November’s dismal 50,000 net rise. Yes, we’ve been here before and so one looks ahead cautiously these days when it comes to reviewing the prospects for the job market. But, heck, it’s the end of the year and so it’s a time for hope, misguided or not. Today’s jobless claims update soars majestically on those terms. Next week may tell us different, but a round of thinking positively fits nicely with the New Year’s weekend ahead.
On that note, this is our last post for 2010. To all our loyal readers, here’s wishing everyone a healthy and prosperous new year! See you in 2011. As John Lennon once sang, “Let’s hope it’s a good one.”