The number of Americans filing applications for unemployment benefits rose above more than a two-year high last week. The week ended December 7 saw 252,000 new claims, well above expectations. The data may have been skewed due to seasonal volatility following the Thanksgiving Day holiday.
Key Takeaways
- Jobless claims rose 49,000 to 252,000 vs. 213,000 expected for the week ended December 7 according to the Labor Department.
- The claims are unlikely to signal a rise in job layoffs, likely affected by seasonal volatility.
- The four-week average came in at 224,000, indicating a more stable market.
Claims are at the highest since August 2017, although this is unlikely to reflect an increase in layoffs. The Thanksgiving Day holiday typically throws off the model used to anticipate volatility in jobless claims data. Claims last were only estimated on the Virgin Islands. The four-week average, which strips out volatility, rose 6,250 to 224,000 last week, indicating a healthy labor market with low layoffs. The number of claims continuing after an initial week of aid fell 31,000 to 1.67 million for the week ended November 30, and the four-week average of these claims dropped 6,250 to 1.68 million.
Jobless Claims vs NFP: {@theterminal chart link: https://t.co/1OcBPrs2B3 } pic.twitter.com/IoZ10En41q
— Michael McDonough (@M_McDonough) December 12, 2019
266,000 jobs were added to the US economy in November, a 10-month high, although the surge was partially related to the influx of General Motors workers returning from strike, and other workers returning to jobs disrupted by the strike. The labor market, which fuels consumer spending, has been a powerhouse of the ongoing period of economic expansion in the US. Unemployment is at 3.5%, near historic lows. The economy continues to grow despite worsening economic conditions worldwide as well as the trade war with China which continues to impact manufacturing and business investment.
The central bank voted to maintain the current benchmark rate of interest at a meeting on Wednesday, indicating that borrowing costs may see no change throughout 2020 due to expectations of modest ongoing growth in the economy. Recent inflation data in producer and consumer prices supports this viewpoint.
Getting VERY close to a BIG DEAL with China. They want it, and so do we!
— Donald J. Trump (@realDonaldTrump) December 12, 2019
Market Reaction
Gold prices have seen strong volatility today, initially spurred on by the unexpectedly high number of claims as well as remarks from the European Central Bank. Spot gold last traded at $1,466.40/oz, up 0.26%. The sudden change in prices may have been due to a tweet from President Donald Trump stating that a deal with China was “getting very close.”
Gold Price Chart
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