After edging higher in recent months, initial jobless claims appear to be stabilizing with fewer Americans applying for unemployment benefits amid a tightening labor market.
Key Takeaways
- The number of new jobless claims last week dipped to near a 49-week low.
- The total number dipped to 216,000 in the week ended December 22, according to the Labor Department.
- The data points to strength in the labor market despite recent concerns of a slowdown.
The amount of claims is 1,000 higher than anticipated. A brief uptick in claims was seen in November and attributed to Thanksgiving coming earlier than usual, fast-tracking seasonal layoffs in some sectors.
The unemployment rate is at the lowest since 1968 with companies still hiring and a record number of job openings still available. A slowdown in hiring was attributed to a lack of skilled workers rather than unavailable jobs.
The more stable four-week moving average fell by 4,750 claims to a total of 218,000,and the number of people already collecting benefits (continuing claims) dropped by 4,000 to 1.7 million, near a 45-year low.
Despite concerns over the trade war and the declining stock and housing markets, the labor market is going strong. An average of 206,000 new jobs were added each month for the first 11 months of 2018, the fastest pace since 2014.
Other periods of market volatility have seen at least some softening of initial jobless claims (notably 2011). This time there's been none pic.twitter.com/sEdmwuhZcV
— Joe Weisenthal (@TheStalwart) December 27, 2018
Expert Outlook
Thomas Simons, senior money market economist at Jefferies LLC, said “Labor market conditions remain very tight despite isolated layoffs. Given the size of the labor force and the typical pace of employment churning, it is unlikely that claims go much lower, outside of seasonal effects that generate one-off dips.”
JP Morgan economist Daniel Silver stated that the data “signals improvement in the labor market relative to a few weeks ago, but softening in conditions relative to a few months ago.”
Market Response
Gold is holding gains after dipping briefly following the jobless claims data. Spot gold last traded at $1,275.30/oz, up 0.48% on the day with a high of $1,278.74/oz and a low of $1,274.32/oz.
Gold Price Chart
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