514,000 New Jobless Claims. Lowest Read in 9 Months
Markets were given a kick of optimism this morning as another downward surprise was seen in the weekly jobless claims report. Initial claims fell to 514,000 in the week ending Oct. 10, the lowest figure in nine months. The prior week’s 520k figure was revised up to 524k.
Claims have fallen in five of the past six weeks, leading the 4-week average down to 531,500, which is also the lowest since early January.
“If weekly initial jobless claims average 530k, or lower, over the remainder of the year, then there is a very high probability that private sector non-farm farm payrolls turn positive by the early January 2010 report,” said John Herrmann, president of Herrmann Forecasting.
Ian Shepherdson from High Frequency Economics was less optimistic. “The underlying trend is clearly both downwards and welcome, but it looks a bit too fast to be sustained,” he wrote prior to the release.
In the other half of the report, the number of people continuing to receive jobless benefits fell 75,000, pushing the total number to 5.992 million. This is the first time the number has fallen below 6 million since March.
The drop, unfortunately, doesn’t necessarily indicate job creation, as the number falls when individuals exhaust the weekly limit on state assistance.
“Our dogged attempt to find evidence of a solid return to job creation has turned up nothing,” said Ellen Zentner, senior economist at BTMU, before the report. “But what we do find is plenty of evidence that job loss will continue to slow, even if it is simply a side effect of fewer separations, rather than increased hirings.”
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