New filings for jobless benefits continued to defy market expectations, falling to 183,000 last week from 186,000 a week earlier, the Bureau of Labor Statistics reported on Thursday.
New jobless claims, which are a proxy for layoffs, remained below the pre-pandemic level of 218,000 for the fifth week in a row. Our preferred measure—the 13-week moving average, which takes out short-term volatility—also fell to 213,000 last week.
While the most recent week’s data will not be reflected in the January jobs report coming out on Friday, the previous three weeks should suggest another strong month of job gains.
Although Federal Reserve Chairman Jerome Powell acknowledged on Wednesday that the economy has been in a disinflationary period, fueling a sharp market rally, a continuing tight labor market should keep wage inflation a concern.
In addition, the disconnect between an increasing number of layoff announcements and low jobless claims serves as a reminder that what makes headlines is not necessarily a reflection of the broader economy.
There is also a lag between the announcement dates and when the layoffs take place. Some companies are giving their employees more than a month of advance notice, pushing the layoff dates further into the future.
