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First Cut: Initial jobless claims levels continued to abate in December 21 week

The level of initial jobless claims continued to abate in the December 21 week. It fell 13,000 to 222,000 after a decline of 17,000 to 235,000 (previously 234,000) in the December 14 week. This has retraced a good bit of the surprise increase of 49,000 in the December 7 week and is likely to remain on that trajectory next week as well. The December 21 headline was closely aligned with market expectations.

The Labor Department cited no special factors in the data. However, the timing of the holidays contributed to the necessity for claims to be estimated for a six states — California, Hawaii, Kansas, Pennsylvania, South Dakota, and Virginia — and Puerto Rico. While this raises the possibility of larger than usual revisions next week for the December 21 week’s data, such estimates are usually fairly accurate.

Continuing claims were down 6,000 to 1.719 million in the December 14 week. Beneficiaries of continuing claims are a bit higher after the surge of new claims earlier in the moth, but are likely to decline in coming weeks. Some workers may no immediately seek out new employment during the holiday period, but the tight labor market and demand for skilled workers should mean they are re-employed fairly quickly.

The insured rate of unemployment held at 1.2% in the December 14 week where it has been for nearly 20 straight months with only the briefed of exceptions.

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