Jobless claims drop less than expected

The number of Americans filing for unemployment benefits fell less than expected last week, according to data released by the Labor Department.

US initial jobless claims declined by 3,000 to 258,000 from an upwardly-revised 261,000. Economists had been expecting a bigger drop to 255,000.

This marked the 86th consecutive week of initial claims below 300,000 – the longest streak since 1970.

The four-week moving average came in at 253,000, up 1,000 from the previous week’s average, which was revised to 252,000 from 251,750.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Pantheon Macroeconomics said: “The sub-250K readings earlier this month could not be sustained; they likely were the result of favorable seasonals reflecting the crash of 2008. We think the underlying trend hasn't change much in recent months, and is in the low 260s.

"That's still very close to all-time lows as a share of total employment, and it helps explain why consumer surveys show that people view the labor market favorably. With claims at this level we'd expect to see very strong payrolls, but the softening of some - though not all - hiring indicators in means we expect another sub-200K payroll for October.”