In what the government describes as a clean report, initial jobless claims fell a very steep and very surprising 34,000 in the December 25 week to a suddenly sub-400,000 level of 388,000 (prior week revised 2,000 higher to 422,000). Adjustments become a big factor during the shortened weeks of the holidays which focuses attention on the four-week average, and the average confirms improvement in the labor market, falling a steep 12,500 to 414,000.
Results on the continuing-claims side are mixed. Slightly more received continuing benefits in the December 18 week than the prior week and the unemployment rate for insured workers rose one tenth to 3.3 percent. A drop in the four-week average is the positive news, down slightly to 4.120 million and down more than 150,000 from the month-ago comparison.
The month-ago comparison for initial claims shows a dramatic 50,000 improvement with the four-week average showing a less flashy but meaningful decline of about 15,000. The Labor Department's confidence that calendar and related adjustment factors are not at play gives today's report special importance. Yet declines in claims during November didn't add up to improvement for underlying payroll growth, that and yesterday's data on consumer confidence, where assessments of the jobs market deteriorated, will limit confidence that payroll growth has picked up this month.