The U.S. Department of Labor’s data keep showing that weekly jobless claims are moving lower and lower. Obviously this is indicative of a rather strong labor market, and it is a last look effort ahead of Friday’s key unemployment and payrolls report.
Initial jobless claims fell another 5,000, down to 249,000, in the week ending October 1. Bloomberg had predicted a reading of 256,000 and Dow Jones called for 255,000.
This marks the second time that claims have dipped under 250,000 this year. Another feat is that this marked 83 consecutive weeks of initial claims below 300,000, the longest streak going all the way back to 1970.
As we usually see in the Labor Department release, there no special factors had an impact on this week’s initial claims. There are of course more considerations here than just the formal number.
The four-week moving average was down 2,500 to 253,500, which is the lowest level for this average since December 8, 1973. Economists and investors use the four-week average as a means of smoothing out the noise that can be seen on weekly numbers.
Continuing claims, which is the army of the unemployed, keeps shrinking as well. This reading comes with a one-week lag, but the continuing claims were down 6,000 to 2.058 million for the week ending on September 24.
Economists and investors have all but given up caring about weekly jobless claims. The reality is that the numbers have been low enough that they will not matter to the financial markets until they begin changing handily. Until then, you’ll have to wait for the unemployment and payrolls data on Friday.
Friday’s formal unemployment rate is projected to be 4.9% by Bloomberg and Dow Jones alike. That is the same as August.
Nonfarm payrolls are projected to be up by 168,000 by Bloomberg and 170,000 by Dow Jones. Bloomberg also projects the private sector payrolls reading at 170,000.