Initial jobless claims totaled 262,000 last week, crushing expectations.
Expectations were that initial claims for unemployment insurance will total 275,000 last week, up slightly from the prior week’s 269,000 total but still indicating continued strength in the labour market.
This is the lowest weekly total since November.
Following the report, Neil Dutta at Renaissance Macro said simply, “The labour market remains solid.”
This week’s number takes on slightly more importance as this will serve as the reference week for the February jobs report, which is set for release two weeks from tomorrow.
Thursday’s big beat, then, portends a potentially huge February jobs report coming up.
In an email following Thursday’s claims data Chris Rupkey at MUFG said, “Net, net, the labour markets continue to outperform and like the Fed meeting minutes yesterday we believe the strong payroll jobs figures better describe the underlying strength of current economic conditions than does the paltry 0.7% real GDP figure in Q4 2015. The economy is better than the markets think, and the low level of jobless claims means what happens overseas stays overseas. America is immune to the worldwide slowdown in growth, and its economy is ignoring the flashing warning signals from the financial markets.”
Ian Shepherdson at Pantheon Macro added that, “It’s too soon to draw any definitive conclusions, but we think the data are consistent with the idea that the underlying trend in claims is more or less steady in the low 270s … The claims numbers and survey data are consistent with payroll growth continuing to trend over 200,000.”
Here’s Shepherdson’s chart, showing this week’s drop in the claims and the flattening four-week trend, which had given some economics-watchers pause that perhaps the best part of the US economy — the labour market — was cooling off.