US initial jobless claims drop more than expected

The number of Americans filing for unemployment benefits fell more than expected last week, with hurricanes Harvey, Irma and Maria impacting the data, according to the Labor Department.

US initial jobless claims decreased by 12,000 from the previous week's unrevised level to 260,000. Economists had been expecting a smaller drop to 265,000.

Meanwhile, the four-week moving average was down 9,500 from the previous week's unrevised average to 268,250.

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 economist Ian Shepherdson said: "We feared a big spike in claims as a result of Hurricane Maria hitting Puerto Rico, but it didn't happen. Given the extent of the devastation and the subsequent drop in economic activity, this is odd.

"The Labor Department has estimated claims for the island, though, and they might just have been much too conservative. Lingering Harvey and Irma effects also helped keep claims above the 240K pre-storm trend, but reversion to that level probably is only a few weeks away. We have no reason to think that the underlying labour market has changed much since August."