US initial jobless claims fall to lowest level in three months

(Sharecast News) - The number of Americans filing for unemployment benefits fell last week to its lowest level in three weeks, according to data released on Thursday by the Labor Department. Initial jobless claims declined by 10,000 to 230,000 from the previous week's level, which was revised up by 1,000 to 240,000. Analysts were expecting a level of 240,000.

Meanwhile, the four-week moving average came in at 236, 750, up 2,250 on the previous week's average, which was revised up by 250.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The distortions triggered by the automakers' retooling shutdowns have faded from the numbers - the shutdowns were less extensive than usual, so claims fell temporarily - so the trend is re-emerging, at perhaps 240k. That's a bit lower than before the shutdowns, but the unreliability of the seasonals means that we think the true trend has been broadly flat since April. That's consistent with the official WARN notice data, which capture pre-announcements of plant closures and layoffs.

"These data suggest claims will be steady at their current level for the next few months, which means that any further softening in payroll growth will have to come via slower gross hiring. In recent months, the NFIB hiring intentions index also has been broadly flat, net, so a first approximation of payrolls for the next couple months, at least, is little change from the recent trend, close to 200k."