APPLICATIONS FALL: The number of Americans seeking unemployment aid fell 5,000 last week to a seasonally adjusted 330,000, the lowest level in five years.
VOLATILE DATA: The decline partly reflects the government's difficulty adjusting its numbers to account for layoffs after the holiday shopping season. Layoffs spike in the second week of January as retailers cut temporary workers. They then fall sharply in the following weeks.
POSITIVE TREND: If the declining trend holds up, it would suggest that the job market is improving. Applications are a proxy for layoffs. Falling layoffs sometimes coincide with more hiring.