Initial jobless claims remain below pandemic level despite seasonal uptick

New filings for unemployment insurance last week ticked up to 207,000 from 198,000, continuing to stay below the pre-pandemic level amid a tight labor market where businesses are holding onto their workers. The headline number for jobless claims has been below the 2019 average of 218,000 for the past five weeks, showing signs of a strong jobs report that will come out on Friday. Still, seasonal distortions around the holiday period might be affecting the data as firms in the past have often let go of their workers in the last weeks of the year as the shopping season ends. According to Thursday’s report from the Labor Department, there were around 7,000 new claims added for the week ending Jan. 1 because of the seasonal effect. The fluctuations in the data, however, did not change the fact that new jobless claims have fallen at a faster pace since October when the delta variant crested. Our preferred measure—the 13-week moving average—had 239,000 new claims last week, a drop from 248,000 in the previous week. That said, there will be uncertainty in the coming months as the impact of the omicron variant begins to materialize and affect new claims for unemployment insurance. Continuing claims dropped to 1.7 million for the week ending Dec. 18, far different from a year ago when that figure stood at 20.15 million amid broad economic restrictions. The largest increases in new claims were recorded in New Jersey (up by 4,660) and Pennsylvania (up by 3,320) while the largest decreases were in California (down by 7,320) and Virginia (down by 2,182).