Initial claims for state unemployment benefits
dropped 33,000 to a seasonally adjusted 521,000 in the week ended Oct.3, the lowest level since early January, the Labor Department said.This is the lowest weekly number, and the lowest four week average for new jobless since mid-January of this year.
Analysts polled by Reuters had forecast new claims slipping to 540,000 last week from a previously reported 551,000. A Labor Department official said seasonal factors expected a decline in new claims at the end of a quarter and a rise at the start of a new quarter.
The four-week moving average for new claims fell 9,000 to 539,750 last week, declining for a fifth straight week. The four-week moving average is considered a better gauge of underlying trends as it irons out week-to-week volatility.
It is also a huge relief after last Friday's jobs report.
Since the monthly jobs report is allegedly based on a survey conducted on the 12th of each month, I intend to post a further hyposthesis about the relationship between these two figures next week.
Please note, the four week average is now more than 16% lower than the peak. This is the threshold at which, if sustained for a long enough period of time, I believe that jobs may actually be added to the economy.
Update from Bonddad:
Here is the chart of claims and the 4-week moving average
This chart is a big relief for me as well. It indicates that the initial unemployment claims continue to move in the direction of recovery.