Weekly jobless claims above 400K

The Department of Labor’s report of initial weekly jobless claims shows that last week’s precipitous drop in filings looks legit — if short-lived.  The previous week’s level of 391,000 claims — a 37,000-claim drop from the previous week — only got upwardly revised by 4,000.  However, this week’s claims rose by 6,000 to finish above the 400K level once again:

In the week ending October 1, the advance figure for seasonally adjusted initial claims was 401,000, an increase of 6,000 from the previous week’s revised figure of 395,000. The 4-week moving average was 414,000, a decrease of 4,000 from the previous week’s revised average of 418,000.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending September 24, a decrease of 0.1 percentage point from the prior week’s unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week ending September 24 was 3,700,000, a decrease of 52,000 from the preceding week’s revised level of 3,752,000. The 4-week moving average was 3,739,000, a decrease of 9,750 from the preceding week’s revised average of 3,748,750.

So the big drop last week really did reflect reality, but the end result is that claims still hover around the 400K mark.  With a couple of exceptions, that’s been where the US economy has been since the beginning of Q2, so the data should come as no great shock.  Interestingly, this result surprised Reuters, but not in the usual way:

New U.S. claims for unemployment benefits rose less than expected last week, according to a government report on Thursday that hinted at an improvement in labor market conditions.

Initial claims for state unemployment benefits climbed 6,000 to a seasonally adjusted 401,000, the Labor Department said, from a revised 395,000 the prior week.

Economists polled by Reuters had forecast claims rising to 410,000 from the previously reported 391,000.

The data falls outside the survey period for the government’s closely watched employment report for September, which will be released on Friday.

Nonfarm payrolls likely increased 60,000 last month, according to a Reuters survey, after being flat in August. The anticipated gain in nonfarm employment will mostly reflect the return of 45,000 striking Verizon Communications workers to payrolls.

Bloomberg also predicted a rise of 60,000, although ADP’s report yesterday predicts private-sector growth of 91,000.  ADP isn’t exactly an oracle on these matters; their predictive value is questionable, although their trendlines are useful.  The 91K growth ADP predicts isn’t that far off from their August report, a month that actually produced zero job growth.  I’d look for a growth number around 65K, perhaps less, and a slight tick upward in the jobless rate to 9.2%.

What do you think tomorrow’s announcement will be?  Take  the poll:

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Beege Welborn 8:01 PM on February 03, 2023