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US initial jobless claims fall more than expected

By Michele Maatouk

Date: Wednesday 27 Nov 2019

LONDON (ShareCast) - (Sharecast News) - The number of Americans filing for unemployment benefits fell more than expected last week, according to data from the Labor Department.
US initial jobless claims declined by 15,00 from the previous week's revised level to 213,000, beating expectations for a small drop to 221,000. The previous week's level was revised up by 1,000.

Meanwhile, the four-week moving average came in at 219,750, down 1,500 from the previous week's average, which was revised up by 250.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Continuing claims - i.e. the number of people already collecting unemployment benefits - fell to 1.640m from 1.697m, versus expectations of 1.690m. This marked the lowest level for insured unemployment since August 1973. The previous week's level was revised up by 2,000.

Pantheon Macroeconomics said: "This is a relief after back-to-back elevated readings, which seem to have been due in part to the California wildfires and Veterans Day seasonal adjustment problems. The return to trend might not last, though.

"The peak in payroll growth came about nine months ago, and in the previous three cycles claims followed the turn in payrolls with lags from six-to-eight months. Weaker hiring drives the initial downshift in job growth; firings follow. We expect to see the trend in claims nudging higher over the next three months, but we don't expect anything very alarming."