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First Cut: Initial jobless claims about normal for the end of December, continue to unwind bump higher at the beginning of the month

Initial jobless claims were down 2,000 to 222,000 in the week ended December 28 from the 224,000 in the prior week (previously 222,000). Claims continued to unwind the unexpected bump higher in the December 7 week when a number of sectors — including manufacturing — made earlier than anticipated cuts in payrolls. The situation is looking more normal at the end of the month.

The Labor Department noted no special factors in the December 28 week, although New Mexico and Puerto Rico had estimates during the holiday period. Unadjusted levels of claims are likely to surge in the next couple of weeks as businesses start to layoff temporary holiday employees. However, some of these workers may be converted to permanent status if they haven’t already. Retailers and transportation companies are hiring and a worker who has some experience and skills is an asset to hold on to.

Continuing claims were up 5,000 to 1.728 million in the week ended December 21, well within normal week-to-week variation and not significant in spite of the slightly higher trend as seen in the four-week moving average of 1.712 million which was up 7,250 in the week. The insured rate of unemployment remained at 1.2%, further stretching out the long string of similar readings since May 2018.

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