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U.S. initial jobless claims fall in mid-October, suggest healthy labor market conditions

Initial jobless claims in the U.S. dropped in mid-October. In the week ended 13 October, initial jobless claims in the nation dropped 5000 to 210k, consistent with consensus expectations of 211k. The four-week moving average in initial claims rose to 212k from 210k previously; however, both weekly initial claims and the four-week moving average continued to be stable, close to recovery-level lows. Continuing claims dropped 13k in the week ended 6 October, to 1.640 million, and the four-week moving average dropped by 1k to 1.653 million. The insured jobless rate remained stable at 1.2 percent for the 23rd straight week.

State wise, North and South Carolina saw a very modest rise in initial claims after the hurricane that made landfall in early September. In North Carolina, initial claims rose around 10k initially; however, they are now showing some downward momentum. In South Carolina, the rise in weekly initial claims was much more modest at around 4k, and that rise has now reverted.

“The relatively mild rise in initial jobless claims following the hurricane in these two states seems at odds with the notable softening in nonfarm payrolls in September; while we believe the storm did temporarily weaken some categories of employment, most notably leisure and hospitality, we continue to have a difficult time reconciling the stability of labor market conditions as indicated by jobless claims data and the slowing in September payroll growth”, stated Barclays in a research report.

For now, the signal from the claims data continues to be one of low rates of job separation and, in turn, healthy labor market conditions.

At 13:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 35.2785. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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