The number of Americans filing applications for unemployment benefits fell last week in a sign of ongoing labor market strength. Initial claims for state unemployment benefits decreased 13,000 to a seasonally adjusted 222,000 for the week ended Dec. 21, the Labor Department said on Thursday.
Economists polled by Reuters had forecast claims would fall to 224,000 in the latest week. Claims have been volatile in recent weeks around the U.S. holiday season and end of the year. The drop in the latest week largely unwound a surge in new claims two weeks earlier that appeared to reflect a late Thanksgiving Day this year compared to 2018. That could have thrown off the model used by the government to strip out seasonal fluctuations from the data.
U.S. stocks rose modestly amid ongoing optimism over an imminent U.S.-China trade deal. U.S. President Donald Trump said on Tuesday he and Chinese President Xi Jinping will have a signing ceremony to ink the first phase of the U.S.-China trade deal agreed to this month.
The U.S. labor market has appeared strong despite a slowdown in U.S. manufacturing and lackluster business investment that economists have attributed to uncertainty around a U.S.-China trade war launched under Trump. In November, the U.S. unemployment rate fell back to 3.5%, the lowest in nearly half a century.
On Thursday, the Labor Department said claims for California, Hawaii, Kansas, Pennsylvania, South Dakota, Virginia and Puerto Rico were estimated for the latest week. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, edged up by 2,250 to 228,000. The underlying trend in claims remains consistent with a strong labor market.
Labor market strength is underpinning consumer spending, keeping the economy on a moderate growth path despite headwinds from trade tensions and slowing global growth that have weighed on manufacturing.
Thursday's claims report also showed the number of people receiving benefits after an initial week of aid fell 6,000 to 1.72 million for the week ended Dec. 14. The four-week moving average of the so-called continuing claims rose 19,250 to 1.70 million.
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