Initial jobless claims remain resilient

REAL ECONOMY BLOG | December 07, 2023

Authored by RSM US LLP

Initial jobless claims inched up slightly to 220,000 last week, remaining within the pre-pandemic level, the Labor Department reported on Thursday.

Claims have hovered around this level for quite some time, continuing to suggest a strong labor market that should support further growth in the fourth quarter.

The data also supports another robust month of job gains. We expect the economy to have added around 187,000 net jobs in November when the employment report is released on Friday.

Our preferred metric for initial claims, the 13-week moving average, is now at 213,000, which is below this year’s average. On top of that, continuing claims fell to 1.86 million for the week ending Nov. 25, much lower than expected and another sign of the labor market’s resilience.

As the economy heads toward the final weeks of the year, claims data might become more volatile because of seasonal hiring patterns. But looking at the long-term trend, initial jobless claims have been performing much better than what we forecasted at the beginning of the year.

That is another reason to believe the economy is heading toward a soft landing instead of a recession that many have predicted.