NEW YORK – Initial unemployment insurance claims jumped 20,000 to 457,000 for the week ending Oct. 30, which more than reversed the previous week’s 18,000 drop to a 437,000 level.
Expectations going into today’s report were for a more moderate rise in claims to a 442,000 level. The four-week moving average of initial claims, which normally provides a better indication of the underlying trend in labor markets rose slightly to 456,000 from 454,000 for the prior week. Continuing claims for the week ending Oct. 23 dropped 42,000 to 4,340,000 from 4,382,000 last week.
“While the rise in claims in the latest week is disappointing, it leaves the level of claims still at the lower end of the 450,000-480,000 range that has prevailed for most of 2010 and remains consistent with continued modest improvement in labor markets heading into November,” said Nathan Janzen, an economist with RBC Economics Research.
“Today’s report will likely have little effect on expectations heading into tomorrow’s October employment report because the payroll employment survey was conducted earlier in the month,” he added. “With that said, the downward trend in the four-week-moving average of initial claims to a 458,750 level in the October payroll survey week from 464,250 in September bodes well for private hiring to improve modestly to 80,000 from the 64,000 increase recorded in September.
“Weakness in government hiring at the state and local level likely persisted in October, although the bulk of temporary census workers — all but about 6,000 – have already been laid off as of the September employment report,” said Janzen. “As a result, we expect that overall employment growth could see its first increase in five months in October, rising about 50,000 in the month after four consecutive declines.”
SOURCE: RBC Economics Research press release