Initial jobless claims spiked more than anticipated last week, raising fresh concerns about the health of the labor market, according to the weekly survey from the Department of Labor.
- Initial claims for unemployment insurance jumped to 258,000, a sharp increase of 33,000 from the previous week’s revised figure.
- This marks the highest level of jobless claims since August 2023 and significantly exceeds economists’ expectations of 230,000.
Four-Week Average: The four-week moving average of jobless claims, which helps smooth out week-to-week volatility, also rose to 231,000, an increase of 6,750 from the prior week’s unrevised average. This marks the first increase in the moving average over the past four weeks, signaling a potential shift in labor market conditions.
Continuing claims, which reflect the number of people still receiving unemployment benefits, also surged more than expected. For the week ending September 28th, continuing claims increased to 1.86 million, a jump of 42,000 from the previous week’s revised level.
- This is the highest level of continuing claims since mid-August and above economists’ predictions of 1.83 million.
Bottom Line: The unexpected rise in both initial and continuing jobless claims could indicate a softening in the labor market. This comes amid broader concerns about inflationary pressures, as consumer prices rose more than expected in September. While inflation remains a pressing issue, the signs of cooling in the labor market may offer some hope that inflationary pressures could ease over time.