For the week ended December 25, U.S. workers filed 198,000 new claims for unemployment, a drop of 8,000 from the previous week and below the 206,000 initial claims expected by economists surveyed by Bloomberg.
Continuing claims for unemployment for the week ended December 18 were 1.716 million against an expected 1.875 million. (And, yes, to make our lives simpler the government reports initial claims and continuing claims with a one-week lag.) The continuing claims number was a pandemic low.
Economists are now looking to a further drop in the official unemployment rate for December to 4.1% or even 4% when the Bureau of Labor Statistics reports on January 7. In November the official unemployment rate fell to 4.2%.
I’d note that there’s a possibility that the Omicron surge in infections has discouraged some workers for looking for jobs–which might depress the labor force participation rate. A lower participation rate would result in a lower official rate of unemployment.
In other words a tight labor market remains tight. Watch for the effects on wage inflation in numbers that will also be reported on January 7.
