Initial Claims Fall to Lowest Level Since March

Initial claims for unemployment insurance fell to their lowest level since March, the Labor Department reported yesterday, but remain elevated from pre-pandemic levels.

The report said the advance figure for seasonally adjusted initial claims fell to 751,000, a decrease of 40,000 from the previous week’s revised level. The four-week moving average fell to 787,750, a decrease of 24,500 from the previous week’s revised average.

Labor reported the advance seasonally adjusted insured unemployment rate fell to 5.3 percent for the week ending October 17, a decrease of 0.5 percentage point from the previous week’s revised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 17—also known as continuing claims—fell to 7,756,000, a decrease of 709,000 from the previous week’s revised level. The four-week moving average fell to 9,053,250, a decrease of 1,055,750 from the previous week’s revised average.

“The labor market continues to gradually improve,” said Sarah House, Senior Economist with Well Fargo Securities, Charlotte, N.C. “The trend points to only gradual improvement, however, with new weekly claims and continued benefit recipients still staggeringly high.”

House noted the pace of improvement has also slowed since the summer, highlighting that after the record growth rate in GDP last quarter, the recovery’s momentum is slowing. “While some recipients have exhausted regular benefits, continuing claims under all programs edged down again the week ending Oct. 10,” she said. “It may not take government restrictions on activity before consumer behavior adjusts to the recent rise in COVID cases across the country, which we suspect will keep businesses under pressure and layoffs elevated in the coming weeks.”