In this morning’s data, Initial Jobless Claims were 200,000 for the week ending January 17th, less than expected and increased by just 1,000 from the previous week’s revised figure. Continuing Claims were 1,849,000 for the week ending January 10th, also less than expected, and a decrease of -26,000 from the previous week’s revised figure. Meanwhile, the updated reading of annualized GDP growth for the third quarter 2025 increased by one tenth to 4.4%, slightly higher than expected.
Overall, initial and continuing claims were less than expected in the most recent week. Initial claims have remained low for some time, well below 300k which many consider the top threshold a properly functioning labor market. In addition, continuing claims have leveled off in recent weeks, and today’s decline shows further improvement. Some individuals may be finding other ways to supplement income rather than filing for unemployment, such as working for ride-sharing companies, delivery services, or other such jobs in the current economy; a dynamic which partly validates the sustained low level of initial claims.
Economic growth was relatively strong in the third quarter of 2025, and today’s estimate was even higher than expected. In addition, the current estimate of GDP growth in the fourth quarter is above 5% on annualized basis, given the improved trade balance figures coupled with strong consumer spending. While the trade balance impact may be temporary, the economy appears resilient as we head into the coming year where the changes from last year’s legislation, the OBBBA, are expected to take effect. How these benefits impact the economy, Federal Reserve policy, and company earnings reports will be key for the economy and markets in the coming months.
In all, the 10-year US Treasury yield ticks slightly higher this morning and equity futures are higher as we head into the market open.
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