Jobless Claims Plunge by 15,000 to 213,000

Jobless claims unexpectedly plunged in the week ended November 23, indicating that the American labor market remains strong.

Initial claims for state unemployment benefits fell by 15,000 to 213,000, the Labor Department said Wednesday. Economists had been looking for a smaller decline.

The prior week’s claims were revised up by 1,000 to 228,000.

The drop in claims is significant because claims had been rising in the two prior weeks. Many economists expect claims, which are a proxy for layoffs, to climb because they view employment as likely to peak soon given the extremely low levels of unemployment and sluggishness in business investment and the manufacturing sector.

Jobless claims can be volatile week-to-week. Economists prefer to look at the four-week average of claims as a more reliable indicator of the labor market. This figure moved down by 1,000 to 220,000.