US jobless claims fall to lowest level since April

The number of Americans filing for unemployment benefits fell last week to its lowest level in five months, according to figures released on Thursday by the Labor Department.

Jobless claims declined to 193,000 from a revised 209,000 the week before, hitting the lowest level since late April and beating consensus expectations of 215,000. The previous week’s figure was revised down by 4,000.

Meanwhile, the four-week moving average fell by 8,750 from the previous week to 207,000. The previous week’s level was revised down by 1,000 to 215,750.

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.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "After 10 straight weekly undershoots to the consensus, it’s fair to say that jobless claims have not followed the steeply rising track expected by many forecasters in the spring. We weren’t on board with that story, but this week’s number is remarkable. We can’t identify any specific factors explaining the drop, but a normal late September rebound in the unadjusted numbers next week would push the adjusted reading back to about 210K, which is much closer to the trend, we think.

"That said, with labour still very hard to find, firms probably are holding on to people who under normal conditions would have been laid off. At this point, then, the softening of the labour market which the Fed wants appears unlikely to come via rising layoffs."