-Chris Rupkey, MUFG
The number of Americans filing for first-time unemployment benefits declined to a 8-week low, official figures revealed on Thursday. However, last week's drop in claims was almost certainly exaggerated due to the Christmas holiday. According to the US Department of Labor, national jobless claims declined 28,000, to 235,000, during the week ending December 30, reaching their lowest level since the middle of November. Meanwhile, economists anticipated a slight deceleration to 260,000 during the reported period. It was the 96th week that initial jobless claims remained below the 300,000 level, the longest streak since 1973. Firms prevented firings as the supply of workers dropped pointing to a tight and healthy labor market. In the meantime, the four-week average of initial claims dropped 5,750 to 256,570 in the past week. Nevertheless, continuing jobless claims advanced 16,000 to 2.11 million in the week ended December 24, the highest rate since September.
The job market is considered to be near or at full employment, supported by the lower unemployment rate. Back in December, rising inflation and strong labor market trends allowed the Federal Reserve to raise its key interest rate to 0.50% from 0.75%.
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