After reporting a bigger than expected increase in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing initial jobless claims pulled back in line with estimates in the week ended January 22nd.
The report said initial jobless claims fell to 260,000, a decrease of 30,000 from the previous week’s revised level of 290,000.
Economists had expected jobless claims to drop to 260,000 from the 286,000 originally reported for the previous week.
With the decrease, jobless claims gave back ground after reaching their highest level since the week ended October 16th.
“The recent rise in Covid cases continues to prop up claims, but as new cases decline, we expect claims will continue to gravitate back to 200k or lower, as underlying conditions in the labor market remain extremely tight,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
Meanwhile, the Labor Department said the less volatile four-week moving average rose to 247,000, an increase of 15,000 from the previous week’s revised average of 232,000.
The report also showed continuing claims, a reading on the number of people receiving ongoing unemployment assistance, climbed by 51,000 to 1.675 million in the week ended January 15th.
The four-week moving average of continuing claims still edged down by 10,750 to 1,651,750 from the previous week’s revised average of 1,662,500, hitting the lowest level since August 1973.
“The rise in continued claims may reflect the recent increase in initial claims, which we expect to unwind in the coming weeks,” said Vanden Houten.
She added, “Looking ahead, we expect continued claims to generally remain at or below 1.70mn as more workers return to the labor market as health conditions improve.”
Next Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for January.
Economists currently expect employment to increase by 238,000 jobs in January after rising by 199,000 jobs in December.
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