U.S. Initial Claims suggest a strong, but not quite as strong, labor market entering February

Falling initial claims figures from early December through mid-January correspond with strong non-farm payroll gains of over 300k in both December and January. The recent gains in initial claims hint that February payroll data will not be as strong but there is no sign yet of labor market weakness, particularly after the latest dip in claims.

Continued claims, covering the week before initial claims, fell by 23k to 1.85m, correcting a strong 66k increase in the preceding week. The message from continued claims is similar to that of initial claims, a recent improvement in the labor market having lost some momentum, but no real sign of weakness.