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The numbers: The number of Americans who applied for unemployment benefits in the last week of 2022 fell to a three-and-a-half month low of 204,000, offering little evidence that the labor market is rapidly cooling off even as the economy slows.
New applications declined 19,000 from a revised 223,000 in the prior week, the government said Thursday.
Economists polled by the Wall Street Journal had forecast new claims would total 220,000 in the seven days ending Dec 31. The figures are seasonally adjusted.
The number of people applying for jobless benefits is one of the best barometers of whether the economy is getting better or worse. New unemployment filings are still historically low, but not quite as low as they were in the spring.
Key details: Thirty of the 53 states and U.S. territories that report jobless claims showed a decrease last week.
The number of people already collecting unemployment benefits, meanwhile, slipped by 24,000 to 1.69 million.
One caveat on jobless claims: They are prone to large swings during the holiday season that runs from Thanksgiving through Martin Luther King Jr. Day in January.
Since Thanksgiving new claims have ranged from a low of 204,000 to a high of 241,000.
Big picture: The low level of jobless claims suggests the economy is still growing even in the face of rising interest rates. The Federal Reserve is raising interest rates in an effort to slow the economy, reduce demand for labor and curb high inflation.
Yet if the economy deteriorates, unemployment filings would be sure to climb and potentially signal an oncoming recession.
Looking ahead: “Initial claims data can be noisy around the holidays, but the low level of initial claims is a reminder that employers overall still aren’t laying off large numbers of workers,” economists at Oxford Economics said in a note to clients.
“The claims data are consistent with a labor market that is still too tight for the Fed and leave the Fed on track to raise rates further in 2023.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Thursday trades.
