US jobless claims fell last week during holiday season volatility

Applications for U.S. unemployment benefits fell last week after spiking earlier this month, continuing a streak of volatility that often occurs during the holiday season.

Initial claims decreased by 22,000 to 220,000 in the week ended Saturday. The median forecast in a Bloomberg survey of economists called for 230,000 applications.

Claims data tend to fluctuate around the holidays. Overall, new filings have remained subdued, hovering near pre-pandemic averages.

Continuing claims, a proxy for the number of people receiving benefits, also fell, to 1.87 million, in the previous week, according to Labor Department data released Thursday. Recurring filings have been gradually trending higher this year. And the number of people who are searching for jobs for more than 15 weeks unsuccessfully has been on the rise this year in monthly government data.

Federal Reserve Chair Jerome Powell said on Wednesday that the labor market remains “in solid shape,” though policymakers are keeping a close eye for any sign of deterioration.

“The labor market is still cooling, by many measures, and we’re watching that closely,” Powell said at a press briefing following the Federal Open Market Committee’s decision to lower interest rates by a quarter-percentage point, marking their third consecutive cut. “It’s not cooling in a quick – or in a way that really raises concerns.”

The four-week moving average of new applications, a metric that helps smooth out volatility, rose to 225,500.

Before adjusting for seasonal factors, initial claims fell last week. New York, Texas and Georgia saw the largest declines.