U.S. initial jobless claims likely to rise, labor market conditions to remain tenuous

The United States initial jobless claims are expected to have risen during the week ended October 15; labor market conditions are expected to remain tenuous as firms look for a sustained pickup in sales activity before increasing employment opportunities.

The weekly jobless claims report is scheduled to be published on October 20 at 08:30EDT (12:30GMT). We expect initial claims for the week ending 15 October will increase to 250k (up from 246k). On balance, despite gradual further improvement in employment conditions, it is anticipated that continuing jobless claims should remain elevated for some time but should continue along a downward path in the months to come.

An initial claims result of 250k would yield a decrease in the four-week moving-average to 249.0k (down from 249.3k). Reflected in the volatility seen in recent months, conditions in the labor market will continue to be tenuous as firms look for a sustained pickup in sales activity before increasing employment opportunities.

This implies an unemployment rate likely holding near the 5.0 percent reading seen the September employment release. Upward pressure in continuing claims will be seen from people unable to find employment amidst this sizeable contraction, providing a floor in continuing claims in the 2.0-2.5 million range in the months ahead.