EmailInitial claims declined from 428,000 for the week ending September 17 to 391,000 for the week ending September 24. The Briefing.com consensus expected the initial claims level to fall to 419,000.
This is the first time since August 6 that the initial claims fell below the upper bound (410,000) of our "Recovery Zone" (which coincidentally was also the last time claims fell below 400,000). It is also the lowest initial claims level since the week ending April 2.
The latest data, however, may not signal an improving labor sector.
The Department of Labor announced that its seasonal adjustment factors this week may be mistimed. This might have caused the DOL to underreport the actual initial claims level. It is possible, therefore, that the employment situation may have actually weakened as the seasonal adjustment factors could be masking worse numbers.
Seasonal adjustment problems have plagued the Department of Labor for much of the year due to a 53-week calendar, a later than normal Easter holiday, and unusual end of quarter volatility. We will get a better understanding of the actual employment situation when the unemployment and payroll data are released next week.
The continuing claims level declined from an upwardly revised 3.749 million (from 3.727 million) for the week ending September 10 to 3.729 million for the week ending September 17. The consensus expected the continuing claims level to fall to 3.715 million.
