Jobless insurance claims for the week of December 10 came in much better than expected at 366,000, 19,000 less than the week before:
Back to back declines of 19,000 in initial jobless claims are signaling sudden strength in the labor market. Claims in the December 10 week came in at 366,000, far below expectations for 390,000 and compared to 385,000 in the prior week (revised 4,000 higher). The 366,000 level is the lowest since May 2008. The four-week average is down 6,500 to 387,750 for the lowest level since July 2008. The average, in a convincing sign of strength, has been down in 10 of the last 12 weeks.
Continuing claims, in data for the December 3 week, rose 4,000 to 3.603 million, but the four-week average is down 5,000 to 3.666 million which is another recovery best. The unemployment rate for insured workers is unchanged at 2.9 percent.
This would be a positive trend, but it still is insufficient to seriously budge the overall unemployment level. These numbers are seasonally adjusted to reflect holiday hiring. I expect these claims to continue in the 400,000 range for the near term. There are too many negative forces waiting in the wings.