The outlook for tomorrow’s jobs reports still looks murky, but two leading indicators in the last two days suggest some upside coming on this key economic metric. For the past several weeks, the trend in weekly initial jobless claims has been fairly static. The massive churn in the job markets had declined enough to get under one million new claims a week, but it hadn’t budged much since dropping below that psychological level.

Today’s report showed a bit more movement in the topline, but another big jump in continuing paid claims, emphasis mine:

In the week ending September 26, the advance figure for seasonally adjusted initial claims was 837,000, a decrease of 36,000 from the previous week’s revised level. The previous week’s level was revised up by 3,000 from 870,000 to 873,000. The 4-week moving average was 867,250, a decrease of 11,750 from the previous week’s revised average. The previous week’s average was revised up by 750 from 878,250 to 879,000.

The advance seasonally adjusted insured unemployment rate was 8.1 percent for the week ending September 19, a decrease of 0.6 percentage point from the previous week’s revised rate. The previous week’s rate was revised up by 0.1 from 8.6 to 8.7 percent. The advance number for seasonally adjusted insured unemployment during the week ending September 19 was 11,767,000, a decrease of 980,000 from the previous week’s revised level. The previous week’s level was revised up 167,000 from 12,580,000 to 12,747,000. The 4-week moving average was 12,701,250, a decrease of 381,250 from the previous week’s revised average. The previous week’s average was revised up by 41,750 from 13,040,750 to 13,082,500.

Two points look clear from this data. First, the topline churn hasn’t much changed since late August; even though this particular week fell by 40K from last week’s four-week average, it’s still within ~5% of that number. It’s still more or less static, which means we’re still on that plateau of job churn that is far too high for a reliable recovery of the jobs market. Too many people are still having to file for first-time claims, which means too many businesses are still having to cut jobs.

On the other hand, the insured claims level has fallen by half in three months, so people are getting jobs, too. This insured-claims metric deals with state payments, not the federal supplement, and state coverage of unemployment has not yet run out for most if not all applicants. This trend in paid claims underscores that progress continues to be made in regenerating jobs claimed by the pandemic shutdowns, even if that progress isn’t proceeding quickly enough.

CNBC’s Steve Liesman notes that this is a better report than expected, but we are also at a too-high level for too long:

Yesterday we also got a surprisingly rosy ADP report on job creation in September. Liesman reported that yesterday and broke the numbers down on-air shortly after its release:

Companies added jobs at a faster-than-expected pace in September due in good part to a surge in manufacturing hires, according to a report Wednesday from ADP.

The firm’s monthly private-sector jobs count showed growth of 749,000, ahead of the 600,000 expected from a Dow Jones economist survey.

The report, done in conjunction with Moody’s Analytics, comes two days ahead of the more closely watched Labor Department count of nonfarm payrolls growth.

That report is expected to show an addition of 800,000 after August’s 1.37 million, with the unemployment rate projected to fall two-tenths of a point to 8.2%.

Let’s just add in our usual caveats about ADP as a reliable forerunner to the BLS jobs report. The history on that is spotty at best, even on trending month-to-month. Expectations in this case are also getting lower, too; right now the expectation level is about 500K below the actual job additions in August. That’s not even plateauing; it’s a decline in momentum, even if we’re still adding jobs. That was to be expected once we got further into the rebound, but we’re still ten million jobs shy of pre-COVID employment. That means we’re still a little too far away from home to lose momentum at that rate.

All of this will put more pressure on Congress to act on Phase 4. We’ll have more on that later, but let’s not forget that tomorrow’s jobs report is the last one we’ll see before the election. Donald Trump has a lot riding on it, and he’d better hope it does better than ADP and the weekly initial jobless claims reports suggest.