Thursday Economic Update
So, initial jobless claims are up by 2,000, less than the forecast of 12,000, to 205,000, while continuing claims were basically flat (down 1,000) at 1.85 million.
Rather unexpectedly, housing starts and consumer spending were up in November as well.
¯\_(ツ)_/¯
The number of Americans filing new claims for unemployment benefits rose marginally last week, the latest suggestion that the economy was regaining some momentum as the year winds down.
The smaller-than-expected increase in weekly jobless claims reported by the Labor Department on Thursday followed recent data showing retail sales unexpectedly rising in November, while single-family housing starts and building permits scaled 1–1/2-year highs. Those reports prompted economists to boost their growth estimates for the fourth quarter.
The economy had appeared in danger of stalling at the start of the quarter. There was even more good news on inflation, with other data on Thursday showing significantly more progress made toward returning it to the Federal Reserve’s 2% target in the third quarter than previously reported.
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Initial claims for state unemployment benefits increased 2,000 to a seasonally adjusted 205,000 for the week ended Dec. 16. Economists polled by Reuters had forecast 215,000 claims for the latest week. Unadjusted claims fell 9,225 to 239,865 last week as large declines in California and Georgia more than offset a sizeable increase in Ohio.
Though the claims data are volatile around this time of the year because of holidays, they remain consistent with a fairly healthy labor market, which is expected to keep the economy from recession next year. A survey from the Conference Board on Wednesday showed the share of consumers viewing jobs as plentiful was the highest in five months in December.
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The economy added 199,000 jobs in November, fewer than the monthly average of 240,000 over the past year, but more than the 150,000 positions created in October.
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Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, could shed more light on the labor market’s fortunes in December. The so-called continuing claims slipped 1,000 to 1.865 million during the week ending Dec. 9, the claims report showed.
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Inflation was not as hot was previously reported. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components rose at a downwardly revised 2.0% rate in the third quarter, the smallest gain since the fourth quarter of 2020. The so-called core PCE price index was previously reported to have increased at a 2.3% pace.