US Economy: Unemployment Benefits Claims Drop Despite Volatile Holiday Season For Labor Market

Despite signs of a volatile work market to close out 2019, the U.S. Labor Department said claim filings for jobless benefits dropped ahead of the New Year.

The Labor Department reported the claims drop in its filings report for the week of Dec. 28 released Thursday. The report said initial claims for unemployment dropped to 222,000, which is 2,000 less than the initial revision of 224,000 from the week prior. It’s 3,000 less than the predicted 225,000 claims economists told Reuters to expect.

The drop also comes several weeks after claim filings saw an uptick to close out November. Economists attributed this uptick to a late Thanksgiving for 2019 compared to 2018.

Claim filings reached an almost 50-year low in November as well, dropping to 3.5%.

However, the drop is the latest in what has been a volatile holiday season for unemployment benefit claims.

The Labor Department said the 4-week average for filings rose to 233,250, an increase of 4,750 from the previous report’s average. It’s also the highest claims average since the week of Jan. 27, 2018, which posted 235,750 filings.

It all comes at a time when the labor market is trying to resist downward trends and perceived weaknesses in other parts of the economy, like the manufacturing slowdown and less business investment. The slowdown in manufacturing and investment has largely been attributed to ongoing trade tensions between the U.S. and China.

Despite the tensions, economists have expressed hope in a larger economic upswing thanks to an apparent ease of tensions between China and the U.S. and a fresh economic stimulus program in China.