US weekly jobless claims drop below expectations: Here’s why

The latest data show that the number of Americans filing initial jobless claims decreased last week signaling a strengthening job market.

On Thursday, initial claims for state unemployment benefits declined to a seasonally adjusted 197,000 for the week ending on September 19. According to reports, claims are near 57-year lows partly due to holiday-related seasonal adjustment noise in the data around moving holidays like Labor Day.

The underlying claims track the historical average reflecting a labor market that has regained its footing after struggling much for the summer. Meanwhile the claim report showed that continuing claims of people receiving unemployment benefits following an initial week of aid, increased by 2,000 to a smoothly adjusted 1.719 million during the week ended September 12.

The continuing claims covered the period during which the government surveyed September’s unemployment percentage. Economists view insured unemployment as aligning with a steady rate which was unchanged at 4.1% in August though the data showed that more people are losing their jobs and experiencing long-work unemployment.

An economist at Citigroup, Veronica Clark said: “After having been stable over the last few months, ​if continuing claims remain at lower levels, this could mean an unemployment ​rate closer ⁠to 4% over the next few months.”

“But we would caution that a lower unemployment rate because of a smaller labor force would not necessarily imply ⁠a retightening ​labor market.”