U.S. Jobless Claims Pull Back More Than Expected

(RTTNews) - A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended December 14th.

The Labor Department said initial jobless claims fell to 220,000, a decrease of 22,000 from the previous week's unrevised level of 242,000. Economists had expected jobless claims to dip to 230,000.

The bigger than expected decline came after jobless claims rose in the two previous weeks, climbing off their lowest level in over six months.

"Initial jobless claims were much lower than expected in the week ended December 14, as seasonal factors continue to batter the weekly claims data," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

Meanwhile, the report said the less volatile four-week moving average crept up to 225,500, an increase of 1,250 from the previous week's unrevised average of 224,250.

The Labor Department also said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, edged down by 5,000 to 1.874 million in the week ended December 7th.

The four-week moving average of continuing claims also slipped to 1,880,250, a decrease of 6,000 from the previous week's revised average of 1,886,250.

"The levels of initial and continued claims are consistent with the picture of the labor market described by Fed Chair Powell after yesterday's FOMC meeting: hiring has slowed, but layoffs remain low," said Vanden Houten.

She added, "The claims data don't alter our view that the Fed will cut rates three times next year, but the risk is for fewer cuts, especially given the signal sent by Fed officials that they are leaning toward just two cuts."