Jobless claims plunge to 4 year low

Claims fall 30,000 to 339,000, well below expectations

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — The number of U.S. workers who filed new applications for unemployment benefits dropped sharply, by 30,000, last week to 339,000, the lowest level in more than four years, the Labor Department reported Thursday. 

Economists polled by MarketWatch had expected initial claims in the week of Oct. 6 to rise 1,000 to a seasonally adjusted 368,000. Last week’s number was revised up by 2,000 to 369,000.

The four week average of new claims, meanwhile, dropped 11,500 to 364,000, the lowest level since late March. The moving average is considered a more accurate barometer of employment trends because it smooths out quirks in the weekly data.

Today’s data fit with the improvement in the labor market seen in the latest monthly jobs report, issued last Friday. The U.S. added 114,000 net jobs in September and the unemployment rate fell below 8% for the first time since President Barack Obama took office. Read more on payrolls report.

“Maybe the unemployment rate drop wasn’t a fluke?” said Robert Brusca, chief economist at FAO Economics.

Still. analysts were cautious about reading too much into one week’s report. They noted that seasonal adjustment factors tend to be positive at the start of a quarter.

“Should this level hold for another week, it would flag a meaningful improvement in October nonfarm payrolls,” noted Sal Guatieri, senior economist at BMO Capital Markets.

Stock futures jumped after the claims data were released. Treasury prices extended losses and the dollar stayed down.

In the week of Sept. 29, the number of people who continued to receive benefits under state unemployment programs declined 15,000 to a seasonally adjusted 3.27 million. The four-week average of continuing claims fell by 7,750 to 3.28 million.

About 5 million people received some kind of state or federal benefit in the week ended Sept. 22, down 43,970 from the prior week. Total claims are reported with a two-week lag. There were 6.8 million people receiving benefits in the same week in 2011.

In a separate report, the government said that the trade gap widened in August to $44.2 billion as exports declined for the third straight month.

 

Greg Robb is a senior reporter for MarketWatch in Washington.