•   Initial claims for unemployment insurance (UI) fell by 18,000 in the holiday shortened week ending December 30, and remain very low on an historical basis.

•   Continuing UI claims fell by 31,000 in the week ending December 23, indicating that firms are not laying off workers, but are cutting back on hiring new ones.

Initial claims for unemployment insurance were 202,000 in the holiday shortened week ending December 30, down by a large 18,000 from a slightly upward revised 220,000 in the previous week. The four-week moving average of claims, which smooths out some of the volatility, was 208,000 in the week ending December 30, down 5,000 from the previous week. 

Continuing claims were 1.855 million in the week ending December 23, down by a large 31,000 from the previous week. The four-week moving average of continuing claims, which smooths out some of the volatility, was 1.867 million in the week ending December 23, unchanged from the previous week. 

Continuing claims for unemployment insurance have risen in the autumn 2023. At the same time initial claims are down from around 250,000 per week in mid-2023, and near decades-long lows. This indicates that few workers are losing their jobs, but that those who do lose them are taking longer to find new jobs. This suggests that businesses are not laying off workers but are cutting back on hiring. This is consistent with slower but still positive employment growth as seen in the monthly jobs numbers. 

The ADP reported this morning that private sector (excluding governments) payroll jobs rose by a larger-than-expected 164.000 in December. This private sector jobs survey has often been wide of the mark of the official BLS report due out tomorrow morning at 8:30 am. We expect that total payroll jobs rose by close to 170,000 including a rise in private sector payroll jobs up 125,000. We expect the unemployment rate edged up to 3.8% and average hourly wages rose by 0.3% keeping the Y/Y rise at 4%. This would be a solid jobs report to close out the year of strong growth gains but a better balance between jobs demand and supply helping to moderate wage gains to near 4%. This is the gradual easing in the labor market that the FOMC would like to see.