In the week ending 1 October 2016, U.S. initial jobless claims dropped to 249,000. This was below consensus expectations. The four-week moving average in initial claims dropped down a tad to 254,000 after rounding. Meanwhile, continuing claims also rebounded. It fell to 2.058 million in the week ending 24 September. The insured jobless rate remained stable at 1.5 percent.
The initial and continuing claims data, after stalling earlier in 2016 imply that labor market conditions in the U.S. are tightening throughout the country. State wise, jobless claims data continue to rebound throughout the board. Only four states recorded having significant year-on-year rises in continuing claims. This indicated broad-based strength in labor markets, said Barclays in a research note. This strength is on the contrary to the pattern early in 2016 when claims increased in many huge states, including a few huge manufacturing states, noted Barclays.
Overall, the weak theme of labor markets in the U.S. seen earlier in 2016 appears to have passed. The low level of initial claims shows that the labor market, from the separations side, continues to be healthy. Continuing claims is also falling at a quick pace. These data suggest that workers who are losing jobs are expected to find new ones.
“We expect this resumption in strength to manifest in improvement in employment growth over the remainder of this year at least relative to the doldrums we saw in the first half of 2016”, added Barclays.
