Jobless Claims Maintain Tight Levels Near 43-Year Lows

The 4,000 U.S. initial claims drop to 254,000 in the second week of December extended the 10,000 drop to 258,000 from 268,000 in the Thanksgiving week, as claims have entered December at a tight level. Claims are averaging 255,000 thus far in December after a particularly lean 252,000 November average, but similar prior averages of 257,000 in October and 254,000 in September.

Next week’s December Bureau of Labor Statistics (BLS) survey week reading will likely exceed the 233,000 November BLS survey week reading that marked a 43-year low, though it should lie near prior BLS readings of 261,000 in October and 251,000 in September.

Analysts with Action Economics expect a 185,000 December nonfarm payroll rise, with upside risk from tight claims, a firm 216,000 November ADP rise, a factory boost from rising oil prices and a diminishing inventory headwind lifting producer sentiment. It also sees continued December strength in the Empire State and Philly Fed data. Vehicle production fell to an 11.9 million clip in November however, alongside a 0.9% vehicle sales drop to a 17.8 million clip.