Initial Jobless claims for the week ending December 9th fell to 202k, down 19,000/8.6% from 221k the prior week. This drop was unexpected as economists had forecasted initial claims to flatline at 220,000. This demonstrates the continued yet surprising resilience of the labour market and a break from expectation-beating readings. However, as with the analysis last week, the current data is skewed due to seasonality changes and thus, cannot be used as representative of the wider labour market trends. Labour market releases will likely return to reality in January for WoW changes and in February for MoM changes. Inital Jobless Claims Chart
Moving onto continuing jobless claims, which increased by 20,000 for the week ending December 2nd, leaving the figure at 1.876mn. Like the initial jobless claims reading, this figure was below the economist expectations of 1.887mn, again, demonstrating a tighter labour market than anticipated. Although seasonality changes are still at play, it is surprising to see continued claims rise given the flux of jobs likely on the market currently, particularly in retail.
Continuing Jobless Claims Chart
Jobless claims are an interesting metric to analyse as increasing claims suggest that demand for labour is slowing down rather than people being less bothered to work in a job. Particularly given rising interest rate payments seen by remortgages in the mortgage applications report, it is likely people want more income than ever to maintain their low-interest rate environment standard of living. Going forth, slowdowns in retail sales/services and manufactuirng PMIs are likely to reflect badly on the labour market and imply that jobless claims will rise, whether they like it or not.
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