Initial jobless claims in the week ended January 5 were down 17,000 to 216,000 after a revised 233,000 in the prior week (previously 231,000). The level was below market expectations and indicated that the brief uptick in the prior week was likely a normal one at year-end as manufacturing slowed, weather-determined construction shut down for the winter, and school districts shuttered for the holidays. Only Puerto Rico estimated claims in the week.
Twelve states reported more than 1,000 new claims in the December 29 week. The largest of these were in Michigan (7,997 in manufacturing), New Jersey (7,845 in transportation and warehousing, accommodation and food service, education services, public administration, manufacturing, and construction), and Pennsylvania (7,367 in transportation, warehousing, and construction).
California saw a sharp drop in the number of new claims in the December 29 week, down 10,107 in services which probably reflected less need for emergency workers after the wildfires.
The coming weeks should reflect the usual layoffs to retail and transportation workers hired for the holiday shopping season. They may also include workers on the margins of the partial federal government shutdown. While government workers are still officially employed and ineligible for benefits, businesses dependent on government contracts that are not being paid may temporarily layoff their workers until the funding of the federal government is resolved.
Continuing claims were down 28,000 to 1.722 million in the December 29 week and the insured rate of unemployment was unchanged at 1.2%. In the historical context, these remain at decades-lows and without sustained upward momentum even with the occasional exogenous even temporarily boosting the level.
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