The number of Americans filing for jobless claims was slightly higher than expected last week, but the trend in claims remained consistent with strong labor market conditions.
Initial claims for government unemployment benefits rose 5,000 to a seasonally adjusted 218,000 for the week ending October 26, the Labor Department said Thursday. Data for the previous week were revised to show 1,000 more applications than previously reported.
Economists polled by Reuters had expected the figure to rise to 215,000 in the last week. The four-week moving average of initial claims, which is a better measurement of labor market trends as it removes the week to week volatility, fell 500 to 214,750 last week. The claims data does not affect the October employment report, which is due to be released on Friday, as it falls outside the survey period.
While lower levels of claims point to strong labor market conditions, job growth is expected to slow sharply in October due to a 40-day strike by GM workers. Government data on Friday showed that 46,000 GM employees were inactive at equipment manufacturing plants in Michigan and Kentucky during the number of non-farm payrolls in October.
Striking workers who are not paid during the period of the payroll survey are treated as unemployed. The strike by members of the United Auto Workers’ Union, which ended last Friday, has had successive effects on the auto industry.
Economists estimated that between 75,000 and 80,000 payroll jobs were cut in October. As a result, the employment report is likely to show only 89,000 jobs in October, down from 136,000 in September, according to the Reuters Economist Survey.
The unemployment rate is expected to rise from 10 percentage points to 3.6 percent. Even with the labor strike, job growth slowed in line with demand for recession and labor shortages.
The Fed cut interest rates on Wednesday for the third time this year, but noted a pause in its easing role that began in July when it cut borrowing costs for the first time since 2008. Fed Chairman Jerome Powell acknowledged moderation in pace of job growth this year, but said that “the job market remains strong.”
Thursday’s report also showed that the number of people receiving benefits after an initial week of aid rose 7,000 to 1,690,000 for the week ending Oct. 19. The so-called four-week moving average increased by 8,750 to 1,690,000.
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