Initial Jobless Claims Drop Again

Initial jobless claims unexpectedly declined again this week, to 293k (consensus 315k). Last week initial claims fell to the second lowest level in the last year at 297k (revised to 298k). This puts jobless claims at their lowest level in four months, and lowered the four week moving average by 12k to 305.5k, the lowest level in a year. The number of states filing more new jobless claims equaled the number recording fewer claims last week.

Continuing claims also fell more than expected, to the lowest level since the end of January. The insured unemployment rate held steady at 1.9%, and is considered a good predictor of the U.S. jobless rate.

The presumption is that the supply of skilled labor remains lean, and demand remains strong, pointing to strength in the labor market. Companies continue to add workers as the economy cools, and others are delaying lay-offs as long as possible because they worry about being able to replace the lost workers quickly.