Jobless claims fell last week to a five-week low despite the ongoing government shutdown, although more furloughed federal workers did seek financial aid. Claims dipped by 3,000 to a total of 213,000 instead of the forecast 220,000.
Key Takeaways
- New claims for unemployment benefits were lower-than-expected, dropping 3,000 to the lowest level since early December.
- This new reading is not far off the 50-year low of 202,000 seen in September.
- The less-volatile four-week average dipped 1,000 to a total of 220,750.
- Continued claims rose by 18,000 to 1.74 million.
Since a jump in claims seen in late November/early December, the numbers have been declining, with the initial spike thought to be connected to the holiday season. The number of continued claims rose by 18,000 to 1.74 million last week and the four-week moving average rose 8,000 to 1.73 million.
The US labor market is still going strong by all accounts, but the partial government shutdown continues to negatively impact federal workers. Federal employee data is released later than other labor data – in the most recently-measured week ending January 5, 10,454 government employees filed for benefits through a separate program, which is 4,760 more than in late December.
800,000 government workers did not receive a paycheck for their work last Friday, with 380,000 workers furloughed in total. On top of that, many private contractors working for government agencies are also working without pay. The shutdown is now the longest in US history.
So if we look through the shutdown, the jobless claims # - already good - was even better https://t.co/tyOjZCtc4J
— Sam Bell (@sam_a_bell) January 17, 2019
Expert Outlook
Joseph Trevisani, senior analyst at FXStreet.com, said “In the last six weeks initial jobless claims have reverted to trend averaging 216,000 down from 230,000 in the prior three weeks. That brief surge is the anomaly as jobless claims continue to signal a robust labor market.”
Meanwhile, Bloomberg’s Joseph Ferro called the report “one of the best real time indicators of the health of the US economy,” adding that initial jobless claims were looking “absolutely solid” today.
Market Reaction
Gold ticked down toward session lows following the unexpectedly strong labor market data. Spot gold last traded at $1,291.56/oz, down 0.03% with a high of $1,295.26/oz and a low of $1,289.92/oz.
Economists have said that a strong labor market is the best line of defense against the potential of a recession – the US is now on the way to a record-breaking decade of economic expansion, the longest in history come summertime.
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