Weekly jobless claims unexpectedly fell last week in a sign that turnover in the labor market remains low.
New data from the Department of Labor showed 227,000 initial jobless claims were filed in the week ending Oct. 19, down from 241,000 the week prior and below the 242,000 economists had expected, per Bloomberg data.
Thursday’s data shows claims have reversed an upward trend seen in September that had brought the metric to its highest levels in more than a year.
Thursday’s release also showed continuing claims hit 1.89 million in the week ending Oct. 12, up from 1.86 million the week prior and the highest level seen since November 2021.
“It is important to keep in mind that the data is likely distorted to the upside due to residual damage from the hurricanes that hit the South and knock-on effects of the ongoing Boeing machinist’s strike,” Jefferies US economist Thomas Simons wrote in a note to clients on Thursday.
At large, economists believe the move lower in weekly jobless claims in part reflects a recovery from recent weather disruptions in the data.
“Claims in some states impacted by Hurricane Helene continued to retreat from their recent highs, although claims in Florida rose, likely a result of Hurricane Milton,” Oxford Economics senior US economist Nancy Vanden Houten wrote in a note to clients on Thursday. “With the latest week’s decline, claims are in line with pre-hurricane levels and consistent with a labor market that continues to be characterized by few layoffs.”
“In a testament to its resiliency, the job market continues to shrug off prevailing worries and uncertainties,” Nationwide financial markets economist Oren Klachkin wrote in a note to clients on Thursday. “Employers may be uncertain about what lays ahead, but they aren’t letting go of workers either. We expect this dynamic to continue as long as the economy remains on a solid footing.”
“Many Districts reported low worker turnover, and layoffs reportedly remained limited,” the report said. “Demand for workers eased somewhat, with hiring focused primarily on replacement rather than growth.”
Thursday’s weekly jobless claims come ahead of a key week for labor market data leading into the Fed’s November meeting. Next week will bring updates on job openings, as well as both the quits and hiring rate, before a crucial October jobs report on Friday, Nov. 1.
Consensus currently expects the US economy added 135,000 jobs in October, down from 254,000 additions in September. The unemployment rate is expected to remain flat.
As of Thursday morning, traders are pricing in a 95% chance the Federal Reserve cuts interest rates by 25 basis points at its November meeting, per the CME FedWatch Tool.
