Despite a minor slowdown in job growth, unemployment claims have dropped more than expected for a fifth straight week.
Unemployment Holding Steady
According to the Labor Department’s statistics, there was a drop of 10,000 claims for state unemployment benefits for the week that ended on January 11. This brings the current number of unemployment claims to 204,000.
Predictions stating that unemployment numbers would rise to 216,000 in the latest week ended up completely missing the mark. What's more surprising is the fact that unemployment claims dropped despite layoffs in several industries such as manufacturing, transportation and warehousing, construction, educational service and accommodation, and food service industries in late 2019 and early 2020. Around this time. claims shot up to 252,000 in early December.
The four-week moving average of initial claims also fell 7,750 to 216,250 last week, slowly but surely straightening out the week-to-week inconsistencies, as the labor market remains solid, with the 50-year low of 3.5% in unemployment rate still being held.
The early December surge, blamed on a late Thanksgiving Day, has proven to be a not too significant deviation, as unemployment claims keep lessening and the economy getting stronger, with roughly 400,000 positions being added in the last two months of 2019.