US Department of Labor (DoL) data show claims dropped below the all-important 400,000 level to a seasonally adjusted 384,000 from the previous week’s adjusted total of 424,000 in the week ending October 5. It was the largest drop since April.
Economists look at the 400,000 initial claims mark as a benchmark of a recessionary labor market.
The latest DoL report was a pleasant surprise to economists in Reuters’ regular poll who were looking for a small decline to 411,000.
The weekly data may have dipped below the 400,000 level, but the four-week moving average of those claims still stood at 412,250, down from the earlier week’s revised 424,500.
Analysts contacted by Reuters were encouraged by the decline but cautioned that one week’s data was not enough to proclaim the slugging economy healed.
“I have mixed emotions. You need to see one or two more weeks of below 400,000 numbers before you can say things have gotten better or stopped deteriorating,” Steve Ricchiuto, chief U.S. economist at ABN AMRO, told Reuters.
The number of workers remaining on unemployment benefits fell by 15,000 to a seasonally adjusted 3.6 million for the week ended September 28, the most recent week these data were available.
Last week, the initial claims figure ticked up 5,000, according to the DoL. (See Jobless Claims Continue Climb ).