Jobless Claims Remain Tight

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The 28,000 initial claims plunge to 235,000 in the final week of 2016, which included Christmas, extended the previous drop of 12,000 to 263,000 (was 265,000) to leave a sharp reversal of the mid-month bounce to 275,000 in the Bureau of Labor Statistics (BLS) survey week and a tight claims path with volatility attributable to holiday distortions. Claims averaged 257,000 in December after similar prior averages of 252,000 in November, 257,000 in October, and 254,000 in September. The 275,000 December BLS survey week reading exceeded the 233,000 November BLS figure, but overshot prior BLS survey week readings of 261,000 in October and 251,000 in September. Analysts with Action Economics expect a 185,000 December nonfarm payroll estimate to face upside risk from an oil-led factory rebound and a diminishing inventory headwind that are lifting producer sentiment. They point to issues including tight claims, surging stock prices and consumer confidence, along with mild weather through mid-December before a late-month cold snap as aiding the jobs numbers. Vehicle sales surged 2.8% to an 18.3 million cycle-high rate in December, although there was a lean 153,000 ADP rise in December after 215,000 surge in November.

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