- Jim O'Sullivan, chief US economist at High Frequency Economics
The number of people applying for US-state unemployment benefits dropped last week from the highest level in seven months, with the underlying trend pointing to consistent improvement in the US labour market. Initial jobless claims across the country declined to a seasonally adjusted 307,000 in the week ended January 16, down from last week's revised 317,000, according to the Department of Labor. The four-week moving average of claims, considered a better gauge of labour market performance as it strips out week-to-week volatility, advanced 6,500 last week to 306,500, breaking above the 300,000 level for the first time since September. Meanwhile, continuing claims for the week ending January 10 rose slightly and came in at 2.443 million, compared to last week's reading of 2.428 million. Employment gains have exceeded 200,000 in each of the last 11 months, the longest such streak since 1994, and job openings remain near 14-year peak. In addition to that, the ratio of unemployed people for every job opening is the lowest since early 2008.
The US unemployment rate slid to 5.6% in December, down from 5.8% in November, reaching the lowest level since June 2008. The US economy created nearly three million jobs last year. The trends in the US labour market will play a key role in the central bank's decision making process regarding monetary policy normalization.
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