The number of Americans applying for unemployment benefits fell more than expected last week. This shows that the labor market remains strong despite the recent slowdown in employment growth.
Initial applications for state unemployment benefits declined by 10,000 to seasonally adjusted 204,000 in the week of January 11, the Ministry of Labor announced on Thursday. With the fifth consecutive weekly drop, claims alleviated the surge in early December that was due to an unusual Thanksgiving day. Damage data for the previous week was not checked.
Economists interviewed by Reuters had predicted that claims would increase to 216,000 last week. The Department of Labor said claims to Alabama were only estimated last week.
The damage data was volatile at the end of 2019. Applications decreased to 203,000 in late November and to 252,000 in early December.
Damage data showed that layoffs in manufacturing, transportation and storage, construction, education, and lodging and catering in late 2019 and early 2020 slowed employment growth in December.
The economy created 145,000 jobs last month after an impressive 256,000 jobs were added in November. The labor market is still on a solid foundation: the unemployment rate reached a 50-year low in December at 3.5%.
The four-week moving average of initial applications, which is seen as a better measure of labor market development as it can offset week-to-week volatility, decreased by 7,750 to 216,250 in the past week.
The damage report from Thursday also showed that the number of beneficiaries after a first week of aid in the week of January 4 decreased by 37,000 to 1.77 million as of April 2018.
The four-week moving average of the so-called permanent losses rose by 10,500 to 1.76 million. (Reporting by Lucia Mutikani editing by Paul Simao)