U.S. Weekly Jobless Claims Unexpectedly Edge Down To 787,000

U.S. Weekly Jobless Claims Unexpectedly Edge Down To 787,000

January 7, 2021

A report released by the Labor Department on Thursday unexpectedly showed a modest drop in first-time claims for U.S. unemployment benefits in the week ended December 26th.

The Labor Department said initial jobless claims edged down to 787,000, a decrease of 19,000 from the previous week’s revised level of 806,000.

The dip surprised economists, who had expected jobless claims to rise to 833,000 from the 803,000 originally reported for the previous month.

Meanwhile, the report said the less volatile four-week moving average climbed to 836,750, an increase of 17,750 from the previous week’s revised average of 819,000.

The Labor Department said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, fell by 103,000 to 5.219 million in the week ended December 19th.

The four-week moving average of continuing claims dropped to 5,457,250, a decrease of 77,000 from the previous week’s revised average of 5,534,250.

“We think that holiday noise and uncertainty about extensions of benefits may have held down claims last week,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

She added, “The risk is for a rise in claims in the weeks ahead now that emergency programs have been extended and an additional $300 in weekly benefits is being provided.”

Next Friday, the Labor Department is scheduled to release its more closely watched report on the employment situation in the month of December.

Economists currently expect employment to rise by 100,000 jobs in December after climbing by 245,000 jobs in November. The unemployment rate is expected to inch up to 6.8 percent from 6.7 percent.

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