The figures: The Labor Department said Thursday that initial unemployment claims decreased by 16,000 to 207,000 in the week ending January 25. In three weeks, this is the lowest level.
According to Wall Street Journal economists, the number of new claims would increase by 5,000, reaching a total of 228,000.
The enormous wildfires in the Los Angeles area caused a brief rise in California last week, pushing claims to a six-week high of 223,000.
Important information: In the most recent week, the number of new claims based on actual filings—that is, before seasonal adjustments—dropped by 56,963 to 227,362.
According to the government, the number of people already receiving unemployment benefits fell by 39,000 to 1.89 million in the week of January 18. This is a decrease from the previous week’s postpandemic peak.
Overall: California claims were much closer to typical, but still high.
According to Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, the majority of those who were unable to work because of the wildfires probably filed a claim in the previous week.
The Federal Reserve expressed optimism about the labor market on Wednesday, calling circumstances “solid.”
At a news conference Wednesday after the central bank’s January meeting, Fed Chair Jerome Powell stated, “When you have an unemployment rate that has been pretty stable now for a full half a year, the labor market does seem to be pretty stable and broadly in balance.”
Considering the future: Carl Weinberg, chief economist at High Frequency Economics, stated, “Today’s claims data support the Fed chairman’s assertion at his press conference yesterday that the [Federal Open Market Committee] need not be in any rush to ease monetary conditions again.”
Reaction of the market: On Thursday, the SPX was expected to open mixed. Early trade saw the yield on the 10-year Treasury note BX:TMUBMUSD10Y drop to 4.508%.
