US initial jobless claims fall to 52-year low

Initial jobless claims fell to a 52-year low in the week ended 4 December, according to the Labor Department, as the US jobs market continued to climb out of its Covid-19 pandemic-fuelled hole.

First-time filings for unemployment came to 184,000 for the week, their lowest print since September of 1969 and better than the 211,000 expected by economists.

Continuing claims increased by 38,000 to just shy of 2.0m, while the four-week moving average for continuing claims dropped to 2.03m, a decline of 54,250.

Pantheon Macroeconomics' Ian Shepherdson said: "The consensus always looked a bit timid, in light of the behaviour of unadjusted claims in the week after Thanksgiving in previous years when the holiday fell on the 25th, but the drop this time was much bigger than in those years, and bigger than implied by the recent trend. A correction next week seems likely, but the trend in claims clearly is falling rapidly, reflecting the extreme tightness of the labour market and the rebound in GDP growth now underway.

"It's very risky for firms to let go staff unless they have no other choice, because re-hiring people later will be difficult and likely expensive. Usually, falling jobless claims imply faster payroll growth, but that didn't happen in November. We hope December will be different; the payroll survey is next week, so we'll be watching the Homebase data - which warned of relatively sluggish November payrolls - very closely."