1st Time Unemployment Claims, Continued Claims Each Fall to 44-year Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 222,000 1st time claims for unemployment insurance for the week ended October 14 – DOWN 22,000 from the prior week – to the lowest level since March 31, 1973;
  • The number of initial claims for the week ended October 7 was revised UP 1,000 to 244,000;
  • The four-week moving average of first time claims DECLINED 9,500 to 248,250;
  • Four week moving average represented 0.162 percent of employment, down from 0.168 percent one week earlier
  • The number of continued claims – reported on a one-week lag – for the week ended September 30 was 1,888,000, DOWN 16,000 from the previous week and the lowest since December 29, 1973 when it was 1,805,000;
  • The four-week moving average of continuing claims DROPPED 22,750 to 1,906,000, the lowest level since January 12, 1974 when it was 1,881,000.

Image result for hurricane irma

The week before hurricanes Harvey, Irma and Maria upset lives – some fatally — and property, there were 236,000 first time claims for unemployment insurance. With recovery in process – though still sketchy in Puerto Rico and the U.S. Virgin Islands – claims fell below that level in the week ended Oct 14 to a 44 year low, the Department of Labor http://www.oui.doleta.gov/press/2017/101917.pdf reported Thursday.

Claims data from Puerto Rico and the Virgin Islands remain uncertain with both communications and transportation in disarray, but nevertheless, the current week’s data show a remarkable swing with a net decline of 14,000. Claims rose 62,000 for the week ended September 2 when Houston was rocked by Harvey and 9,000 after Irma swept through Florida. But claims dropped 85,000 in the intervening weeks – including 47,000 in the last three weeks alone.

The result is the labor picture is looking stronger than it has in years.

But, as the Job Openings and Labor Turnover Survey suggested, there remains a “skills gap” with more job openings than hires which should produce higher wages to continue to stimulate sales. Of course, that’s until Federal Open Market Committee steps in to “remove the punchbowl just as the party heats up.”

The FOMC meets twice more before the year ends with another rate hike likely at at least one of those meetings.

The claims numbers also suggest the next employment report from the Bureau of Labor Statistics could show a sizable jump in payrolls wiping out the 33,000 drop registered for September. The Employment Situation report is likely too to to show another drop in the unemployment rate with increased hiring for the rebuilding efforts in Texas and Florida.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

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