Initial jobless claims jumped 30K to 586K in the week ending December 20, above expectations (consensus: 558K). This pushed the four-week moving average up to 558K, the highest since December 1982. According to the Department of Labor, an increase in manufacturing and auto layoffs heavily contributed to the jump in claims. Continuing jobless claims slipped to 4.370mn in the week ending December 13 from 4.387 the prior week. The insured unemployment rate held at a 16-year high of 3.3%.
The continued increase in jobless claims paints a negative picture of the labor market. Market expects another very weak payroll report in December with the unemployment rate climbing 0.3pp to 7.0%.
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