Initial jobless claims report that was released today shed some rays of hope. It fell to the lowest since January 2009.
521,000 initial jobless claims were filed in the week ended Oct. 3, down 33,000 from an upwardly-revised 554,000 the previous week. A consensus estimate of economists surveyed by Briefing.com expected 540,000 new claims.
To smooth out week-on-week fluctuations, 4-week moving average of initial claims was often placed more emphasis. The figure was 539,750, down 9,000 from the previous week's revised average of 548,750.
6,040,000 people filed continuing claims in the week ended Sept. 26. That was down 72,000 from the preceding week's ongoing claims. The 4-week moving average for ongoing claims fell by 15,750 to 6,144,250, from the prior week's revised average of 6,160,000.
There is a caveat. The slide in continuing claims may not be a positive sign, according to the chief economist of Nomura Global Economics, David Resler, as it may signal that more filers are turning into extended benefits.
Quotes from CNN's article "Jobless claims fall to 9-month low"
Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, nor people who have exhausted their benefits.
"When we add in the number of people on the extensions, we see that figure is rising and has been doing so consistently," Resler said, adding that comparison is difficult because extension data lag continuing claims by a further week
High Frequency Economics' Shepherdson said he does not expect claims "to keep falling this fast," and that the decline will slow through the year-end and into 2010 although the downward trend will continue.
But Nomura's Resler said he thinks initial claims could fall below the 500,000 mark by the end of October."We keep seeing more evidence that fewer workers are being laid off, and enough of the economic data is more positive," Resler said. "That, plus today's decline, tells me that hope isn't just a pipe dream.
"While no "absolute threshold" of claims exists, Resler said, he thinks payrolls will increase when initial filings hit 475,000 or 450,000.