Declining unemployment may signal stronger job market

by Megan Hart
Initial unemployment claims fell last week, the government reported Thursday, beating economist expectations and offering a hint that Friday’s critical jobs report might also offer better-than-anticipated results.

For the week ended September 27, Americans filed a seasonally adjusted 287,000 initial jobless claims. That number is down 8,000 from the previous week’s adjusted total of 295,000 claims, and is very low by historical standards.

The latest claims total landed 10,000 below than the 297,000 that economists polled by Bloomberg had been expecting.

Because the weekly reports are routinely volatile, many economists prefer to look at the four-week moving average.  Last week’s average fell by 4,250 claims to 294,750, the second lowest average since the boom year of 2006.

 

Some economists believe the latest report reinforced the recent upswing in the job market.

“The trends in the main figures of the claims report generally point to continued improvement in the labor market,” JP Morgan economist Daniel Silver said in an online analysis of this week’s claims report.

The August jobs report, which showed that a modest 142,000 new jobs had been created, was a major disappointment after a string of much stronger monthly reports.  Economists are currently expecting that September will show a more robust 215,000 increase.

Even if Friday’s numbers exceed expectations, some economists remain wary of the job market’s recovery.

“Labor markets are showing some signs of healing, but still have a long way to go before they can be considered ‘healthy,’” Mesirow Financial’s chief economist Diane Swonk said recently on the company’s “Economic Minds” blog.