US: Another negative print in NFP in January remains within the realm of possibility – Wells Fargo

Data released on Thursday showed a larger-than-expected decline in initial and continuing jobless claims in the US. According to analysts at Wells Fargo it is a welcome development but they warn new filings remains elevated. 

Key Quotes: 

“At 900K, initial claims remain elevated as the jobs market continues to suffer under efforts to contain COVID.”

“This week's claims numbers cover the survey week for the January employment report. Between the December survey week, initial filings edged up by 8K.That compares with an increase of 144K between the November and December surveys and suggests that another decline in payrolls remains a real possibility in the January employment report.”

“The total number of claims recipients across all programs fell to 16.0M the week ending Jan. 2 (the most recent week available). However, with new claims having moved up in recent weeks and more generous weekly payments following the December relief bill, we expect to see the pace of improvement slow.”