It was a mixed week on the employment front: Initial jobless claims unexpectedly rose 11,000 to 531,000 for the week ending October 17, but continuing claims fell by 98,000 to 5.92 million, the U.S. Labor Department announced Thursday.
Economists surveyed by Bloomberg had expected initial jobless claims to total 519,000 this week. Meanwhile, the 4-week moving average for initial jobless claims decreased by 750 to 532,250. A year ago, initial jobless claims totaled 479,000. Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths out anomalies for strikes, holidays and other idiosyncratic events.
Concerning the 5.92 million continuing claims stat, it's the lowest level for that long-term employment metric since April. A year ago, continuing claims totaled 3.76 million.
Economists also monitor the continuing claims stat because it provides a snapshot of how long it's going to take the typical person to find comparable employment after losing a job. In general, continuing claims above 3 million reflect a slack labor market, and point to extended job searches of six to nine months or longer.
The largest increases in initial claims for the week ending October 10, the latest week for which data is available, were in Florida, 9,976; New York, 5,411; Wisconsin, 4,999; Indiana, 4,977; and Arkansas, 4,704. The largest decreases were in California, 7,062; Tennessee, 294; Maine, 140; and Nebraska, 34.
The highest insured unemployment rates for the week ending October 3, the latest week for which data is available, were in: Puerto Rico, 6.6 percent; Oregon, 5.3 percent; Nevada, 5.2 percent; Pennsylvania, 4.9 percent; California, 4.8 percent; Michigan, 4.7 percent; Wisconsin, 4.7 percent; North Carolina, 4.6 percent; South Carolina, 4.5 percent; and Washington state, 4.5 percent.
Economic Analysis: A tepid, mixed week regarding employment data. U.S. stock markets are likely to focus on the continuing downward trends of the 4-week moving average and continuing claims. Those declines, combined with signs of stabilization in the the nation's manufacturing and housing sectors, provide additional evidence that an economic recovery, even if mild, is under way. That said, the market will need to see the end of monthly layoffs soon (roughly by January or February) and the resumption of job creation, or concerns will grow about the recovery's ability to decrease the unemployment rate -- and those concerns would put downward pressure on stock prices.
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