New US unemployment benefits claims rise again as labor market cools

By Augusta Saraiva

Initial applications for US unemployment benefits increased in the week leading up to Christmas, while remaining at a level that is consistent with a resilient labor market.

First-time claims rose by 12,000 to 218,000 in the week ended Dec. 23. The figures tend to be volatile around the holidays. The four-week moving average, which offers a clearer picture of the trend, was little changed at 212,000 last week, the lowest since late October.

US Jobless Claims Graph Data (Photo: Bloomberg)

Continuing applications, a proxy for the number of people collecting unemployment benefits, rose to 1.88 million the week prior.

 

Despite last week’s increase, first-time applications for unemployment benefits remain near historical lows, adding to evidence that companies are reluctant to pare headcounts against a backdrop of steady demand.

Thursday’s claims data precede the government’s monthly jobs report at the end of next week. Economists forecast a still-healthy 170,000 increase in December payrolls, consistent with resilient labor demand that has been key in powering the economy.

Such job growth reinforces some forecasts that Federal Reserve officials, after almost two years of aggressive interest-rate hikes, will be successful achieving a soft landing for the economy — where they manage to tame inflation while avoiding a surge in unemployment.

So far, the job market has proved durable while inflation is slowly getting closer to the central bank’s 2% target.

On an unadjusted basis, initial claims increased by 31,570 to 272,610. California, Missouri and New Jersey led the advance, while claims fell the most in Texas. The figures for California and Texas were estimated.