US jobless claims fall 7K, revisit 42-year lows

Labor market my no be so weak after all

The number of Americans filing new applications for unemployment benefits fell back to a 42-year low last week, suggesting the labor market remained strong despite an abrupt slowdown in job growth in the past two months.

Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 255,000 for the week ended Oct. 10, the Labor Department said on Thursday. Claims were last at this level in July, which was the lowest since November 1973.

Claims for the prior week were revised to show 1,000 fewer applications received than previously reported. It was the 32nd straight week that claims remained below the 300,000 threshold, which is normally associated with a strengthening labor market.

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The low level of layoffs is in sharp contrast with the recent cool-off in employment growth. Nonfarm payrolls growth in August and September averaged 139,000, the weakest two-month rise since January last year.

The slowdown is puzzling given job openings are at record highs. Some economists say the step-down in hiring is because employers cannot find qualified workers for the open jobs.

Economists polled by Reuters had forecast claims rising to 270,000 last week. A Labor Department analyst said there were no special factors influencing the data.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,250 to 265,000 last week, the lowest level since December 1973.

The claims report showed the number of people still receiving benefits after an initial week of aid fell 50,000 to 2.16 million in the week ended Oct 3.

That was the lowest reading since November 2000 and suggested the long-term unemployed were finding jobs.