U.S. initial jobless claims rise, but remain in line with sound labor market activity

Initial jobless claims in the U.S. increased in the week ended 21 October to 233k from a revised 223k a week earlier. In the recent weeks, initial jobless claims have dropped after the landfall of the three major hurricanes in the months of August and September. Initial claims from Texas normalized first, and claims from Florida have continued that trend. This week, initial claims in Florida dropped to 10,220 from 19,575 in the week ended 27 September. Initial claims in that state had been running around 7000 per week before the storms, further modest improvement ahead, stated Barclays in a research report.

Countering the improvement in Florida were initial claims in Puerto Rico, which increased to 3269k as the island continues to struggle with the devastation wrought by Hurricane Maria. Initial claims fell immediately after the landfall, which is attributed to inability to report and collect data. Initial claims rose more recently and are mostly reflective of the state of affairs on the island. Claims data for Puerto Rico are expected to be elevated for some time.

In spite of the rise in initial claims this week, the four-week moving average in claims dropped to 240k, from a week earlier. Elsewhere, continuing claims dropped 3000 to 1.893 million in the week ended 14 October and the four-week moving average improved by a similar magnitude and now stands at 1.904 million. The insured jobless rate remained at 1.3 percent for the second straight week.

“Altogether, we read this week’s claims data as indicative of healthy labor market activity”, added Barclays.

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