Jobless Claims Break Even Lower

After holding at a long plateau at extremely low levels, initial jobless claims may now be breaking even lower to point to even less slack on the unemployment side of the labor market. Initial claims fell 13,000 in the October 3 week to 263,000 for the sharpest decline and lowest level in 2-1/2 months. The 4-week average is down 3,000 to a 267,500 level that is nearly 10,000 below the month-ago comparison which offers an early hint of strength for the October employment report.

Turning to continuing claims which are reported with a 1-week lag, claims rose 9,000 to 2.204 million in the September 26 week but the 4-week average is down 14,000 to 2.222 million. The average is at its lowest level in 4-1/2 months and is down more than 25,000 from the month-ago comparison. The unemployment rate for insured workers remains at a rock bottom 1.6 percent.

Estimates were made for South Carolina, which has been hit by heavy flooding, and Nevada submitted its own estimates. Otherwise there are no special factors in what is an especially standout claims report.

Recent History Of This Indicator:
Jobless claims are expected to fall back slightly to 271,000 in the October 3 week. For the past six months, claims have been signaling tight conditions in the labor market and have been offering the hawks their strongest arguments at the FOMC.