New applications for unemployment insurance benefits dropped to 258,000 in the week that ended Saturday, the Department of Labor reported Thursday, down from 260,000 the week before.
That drop in jobless claims was mostly in line with private-sector forecasters’ expectations for 255,000.
Meanwhile, the total number of people receiving unemployment benefits fell to 2.04 million in mid-October, Thursday’s report said, the lowest such number since the dotcom bubble year of 2000.
Low jobless claims are a good sign for jobs and the economy, as they indicate that fewer people are being laid off. In recent weeks, jobless claims, which are adjusted for seasonal variations, have been among the strongest signals regarding economic growth.
Economists calculate that new jobless claims numbers below roughly 300,000 indicate growing employment. Over the past month, new claims have averaged just 253,000, including some of the lowest weekly numbers since the late 1970s.
That hot streak has indeed coincided with relatively strong job growth: The economy has averaged 192,000 new payroll jobs a month in the past three months, well over the roughly 50,000 to 100,000 needed to keep the unemployment rate steady.
Nevertheless, there are some hints that the economy may be weak despite the apparent rarity of layoffs. Deutsche Bank economists wrote in a research note Wednesday that other labor market indicators with a history of predicting recessions are less positive, suggesting a “fragile” economy. “Even though initial jobless claims are low, there are indications that the labor market continues to lose momentum,” they wrote.
At the same time, there are other signs that the jobs recovery has momentum. For instance, early data for holiday hiring has been encouraging.
