Numbers: The number of Americans filing for unemployment benefits fell in the final week of 2023 to its lowest level in nearly three months at 202,000, suggesting the weak labor market still has plenty of strength left.
New unemployment claims fell by 18,000 from a revised 220,000 the previous week, the government said Thursday.
Economists had expected new claims in the week ending December 30 to reach 219,000.
People apply for benefits after being laid off. New claims remain historically very low despite declining employment rates.
Key details: New unemployment claims fell in 31 of the 53 states and territories that report these numbers to the federal government. They rose in 22 other states.
Meanwhile, the number of people receiving unemployment benefits in the United States fell by 31,000 to 1.85 million. However, the gradual rise in so-called continuing claims over the past year is a sign that people are taking longer to find new jobs.
Warning: New unemployment claims tend to jump up and down during the holiday shopping period that runs from Thanksgiving through late January due to temporary hiring. Economists prefer to wait until February before trying to identify broader trends in the labor market.
The Big Picture: High interest rates have slowed the economy and reduced the need for companies to hire more workers.
The United States is still growing fast enough to encourage companies to retain most of their current workers, especially in light of the worst labor shortages since World War II. This is a good sign for the economy.
I look forward: “The initial claims data are consistent with labor market conditions that are easing but not unwinding and continue to be characterized by relatively few layoffs,” said chief US economist Nancy Vanden Houten of Oxford Economics.
Market reaction: Dow Jones Industrial Average DJIA,
and Standard & Poor's 500 SPX,
It is scheduled to open trading higher on Thursday.
