Jobless Claims Fall to Lowest Level Since January
Weekly claims for unemployment benefits fell more than forecasts in the week ending October 3. The reported 521,000 new claims is the lowest weekly figure since early January.
Economists had been expecting 540k initial claims after the prior week’s 554k figure (revised from 551k). Before last week’s rise, claims had been moderating for three consecutive weeks.
The 33,000 drop in new claims drove the 4-week average down by 9k to 540k, the lowest since mid-January.
“We believe claims need to settle into the 400k to 450k range before job losses should halt,” said Joseph LaVorgna, chief US economist at Deutsche Bank. “Nevertheless, the downtrend in claims is encouraging and points to continued, albeit gradual, improvement in the labor market.”
Elsewhere in the report, the number of people continuing to receive jobless benefits fell to its lowest level since the end of March. There were 6.040 million claimants in the week ending September 26, a decrease of 72,000 from the prior week and the third straight decline overall.
Those declines have allowed the insured unemployed rate to drop to 4.5%, a level not seen since in six months. However, some economists pointed out that the decline may simply reflect the exhaustion of benefits from the state rather than new job creation.
LaVorgna said the data was consistent with the unemployment rate peaking “sometime with the next six months,” a scenario compatible with mild growth over the next several quarters.
US equity futures responded favorably to the release. With half an hour to go before the market opens, the S&P 500 is up 10.6 points, or 1%.
Here is a chart illustrating recent trends in Jobless Claims Data…
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