First Time Jobless Claims Drop 22K, Back To Pre-Hurricane Levels

Jobless claims have mostly returned back to pre-hurricane levels, at a lower-than-expected 222,000 in the October 14 week. This is the lowest reading in 44 years. The October 14 week was the sample week for the October report and a comparison with the sample week of the September employment report points to improvement for the monthly report: the headline level is down 38,000 while the 4-week average, now at 248,250, is down 20,500.

Hurricane effects are ebbing with Texas and Georgia back to pre-hurricane levels though Florida, at just over 11,000 in the latest week, is still running about 4,000 to 5,000 higher. Puerto Rico, which for the past 2 weeks has reported its own data and has not had to be estimated by Washington, is also at pre-hurricane levels though the jury is still out whether claims in the territory will move higher as displaced workers, amid the dislocations, get themselves to the unemployment office.

Continuing claims, where data lag by a week, are also favorable, down 16,000 in the October 7 week to a new multi-decade low at 1.888 million. The unemployment rate for insured workers is a very low 1.3 percent.

Puerto Rico is still an unknown wildcard but in any case the territory's data are not part of the monthly payroll series in the establishment half of the monthly employment report. September payrolls fell 33,000 and, based on jobless claims at least, expectations are likely to build for a substantial payroll snap-back for October.

Recent History Of This Indicator:
Effects from Hurricanes Harvey and Irma have been clearly fading in jobless claims which came in at 243,000 in the October 7 week and only slightly above late August levels. But the effects of Hurricane Maria remain as a major wildcard as Puerto Rico where claims, which are no longer being estimated, have been dribbling in not due presumably to lack of joblessness in the territory but to lack of access to San Juan's unemployment office. Any effect, however, isn't the call among forecasters who see initial jobless claims coming in little changed at 243,000 in the October 14 week.