- Chris Rupkey, chief financial economist at MUFG Union Bank
The number of Americans filing new applications for unemployment benefits rose more than expected last week, but the underlying trend remained consisted with sustained strength in the jobs market. Initial claims for state jobless aid soared by 17,000 to a seasonally adjusted 298,000 for the week ended December 27, the Labor Department said, following four consecutive weeks of drops. The four-week moving average of claims, considered a better gauge of labour market trends as it strips out weekly volatility, climbed only 250 to 290,750 last week. It has stayed below the 300,000 mark for 16 weeks in a row. The US government is projected to report next week that non-farm payrolls increased 240,000 in December following the November's rise of 321,000, marking the 11th straight month of job gains above 200,000, the longest such stretch since 1994. The unemployment rate is seen dropping to 5.7%, which would be the lowest level since June 2008.
A separate report revealed that the number of contracts to purchase previously owned US homes climbed modestly in November, indicating a still weak housing market despite months of robust economic growth and job creation. The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in November, edged up 0.8% to 104.8. The NAR also revised its October reading to a slightly lower level.
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