The number of people who applied for unemployment benefits fell sharply last week, returning near historic lows the week before Thanksgiving and indicating ongoing strength in the labor market. Claims fell 15,000 in the week ended November 23 after hitting a 5-month high.
- Claims rose to a 5-month high before tumbling 15,000, dropping near historic lows at 213,000.
- The drop comes just in time for Thanksgiving, allowing for increased spending during the holiday season. The holiday may have impacted claims, however.
- The result beat forecasts of 220,000 claims for the week ended November 23.
Jobless claims are often volatile from November onwards, with Veterans Day and Thanksgiving sometimes skewing results. It could be the case that companies are hiring part-time staff to cover employees taking time off during the Thanksgiving holiday, thus increasing the numbers. However, the drop in claims may simply be a correction to indicate the underlying strength of the labor market.
The monthly average of claims dropped 1,500 to 219,750, giving a more stable view of the market. The number of people collecting benefits after an initial week of aid dropped by 57,000 to 1.64 million, near the lowest point in decades.
#USA Initial claims fell to 213k. Momentum in initial jobless claims improved from modestly negative to neutral.
Initial jobless claims have so far been immune to the weakness in labor market conditions that surveys are showing (e.g. Conference Board consumer confidence, NFIB). pic.twitter.com/ZomJKTLCmk
— Christian Witt (@CnhWitt) November 27, 2019
The General Motors strike and the recent wildfires in California disrupted the workforce in recent weeks, likely contributing to the 5-month high seen in claims the week before last. There is little sign of layoffs rising in the labor market, and for now, it seems that consumer spending is supported by a healthy jobs market that continues to power the US economy. Q3 GDP was reported at 2.1% growth, or moderate growth.
Gold has faced selling pressure following reports of moderate GDP growth, a rebound in durable goods orders, and a major drop in jobless claims. Spot gold last traded at $1,454.65/oz, down -0.35% with a high of $1,462.83/oz and a low of $1,453.88/oz.