Initial jobless claims fell unexpectedly to 211,000 for the last week of December, the Labor Department reported on Thursday.
The decline put initial claims at their the lowest level since April, fully offsetting the spike in the summer, which by now is looking more like seasonal volatility.
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While last week’s data included a long holiday, the drop in new claims, the year’s first important piece of economic data, suggested that the labor market remains resilient.
The data should give some boost of confidence to the market ahead of the December jobs report, which will be released on Jan. 10.
We are forecasting no change to the unemployment rate at 4.2% in the December report while payroll gains should stay around 120,000, which we think is the long-term sustainable level without putting more pressure on inflation.
In addition to the decline in initial jobless claims, continuing claims also had a sizable drop for the week ending Dec. 21, reaching their lowest level since September. Continuing claims have been trending up since 2022 as the labor market cools.
‘The decline is consistent with our forecast that job gains will pick up as growth, fueled by fiscal spending, remains strong.
