US unemployment benefit applications declined more than anticipated last week, highlighting the resilience of the American labour market heading into the holiday season.
Initial jobless claims fell by 22,000 to reach 220,000 for the week ending December 14, surpassing economists' expectations of 229,000. The latest figures mark a notable improvement from the previous week's 242,000 claims.
The unexpected drop in new unemployment applications suggests employers are maintaining their workforce and avoiding layoffs, even amid economic uncertainties. This trend could boost consumer confidence and spending power, which drives much of the US economic activity.
The data also showed positive developments in continuing claims, which track people receiving unemployment benefits for extended periods. These claims decreased by 5,000 to 1.874 million for the week ending December 7.
For a more comprehensive view of labour market trends, economists often reference the four-week moving average, which smooths out weekly fluctuations. This measure also showed improvement, with continuing claims dropping by 6,000 to 1.880 million.
The better-than-expected jobless claims data could influence the Federal Reserve's monetary policy decisions, as a strong job market typically supports the case for maintaining higher interest rates to manage inflation.
Market analysts note that while weekly data can be volatile, the current trends point to underlying strength in the US labour market, potentially setting a positive tone for economic growth heading into the new year.