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.
Though shortened weeks and special factors during the holidays often cloud this report, the Labor Department cites no difficulties with the data. The data point to a strong upward pivot underway in the jobs market and will build expectations for a strongly improved December employment report.
Market Consensus before announcement
Initial jobless claims for the December 3 week fell a sizable 23,000 to 381,000, the lowest level since February. Although the BLS reported no unusual factors in the data, the unadjusted week-to-week increase for the post-Thanksgiving week was the largest of the year, a factor that seasonal adjustments smooth though these adjustments are less reliable for weekly data than monthly numbers. The holidays are always a tough time to get a clear read on weekly claims data.