The number of Americans filing new jobless claims last week fell to the lowest level since late 2022, suggesting job growth is likely to remain strong in January.
Initial claims for national jobless benefits fell 16,000 to a seasonally adjusted 187,000 for the week ended Jan. 13, the lowest level since September 2022, the Labor Department said on Thursday. Economists interviewed by Reuters had forecast 207,000 claims for the latest week.
Claims data tends to be volatile in the middle of the new year. The labor market is gradually loosening, with employers generally reluctant to lay off workers due to difficulties finding workers during and after the Covid-19 pandemic.
The Fed's Beige Book report on Wednesday showed that "nearly all states are recording one or more signs of a softening labor market," including larger applicant pools, lower exchange rates, and slowing wage pressures.
Waima said job shortages still exist, with the report also showing that "two states continue to record tight labor markets, and some findings illustrate employment challenges for companies seeking specialized skills."
These claims data will likely cause financial markets to further reduce their interest rate cut bets in March.
The report followed strong retail sales growth in December and comments by Fed Governor Christopher Waller on Tuesday that the economy was "developing well," which he said gave the US central bank "the ability to proceed cautiously." The Fed has increased its policy rate by 525 basis points to the current range of 5.25%-5.50% since March 2022.
These claims data cover the period in which the government surveys employers for the nonfarm payrolls component of the January employment report. Unemployment claims decreased between the December and January survey periods. The economy added 216,000 jobs in December compared to 173,000 in November.
Next week's data on the number of people receiving benefits after the first week of aid, a sign for employers, will give further clues about the state of the labor market in January. Continuing claims fell 26,000 to 1.806 million during the week ended Jan. 6, according to the claims report.
These ongoing claims have mostly increased since mid-September, which is largely due to the difficulty of adjusting data for seasonal spikes after the extraordinary surge in benefit claim registrations at the start of the pandemic.
