Jobless claims post sharp decline to 326,000, better than expectations

The total of Americans submitting jobless claims fell sharply last week as enhanced federal unemployment benefits wound down, the Labor Department reported Thursday.

Initial filings for unemployment benefits totaled a seasonally adjusted 326,000 for the week ended Oct. 2, below the 345,000 Dow Jones estimate and a drop from the previous week’s 364,000.

The numbers came at a time when most pandemic-related programs that extended unemployment benefits are winding down, and amid hopes that declining Covid cases will spark a round of more aggressive hiring heading into the fall.

Stock market futures rose slightly following the report, adding to already strong gains. Government bond yields also were higher.

The weekly total was the lowest level since Sept. 4 and reverses a trend of rising claims over the past three weeks.

However, the four-week moving average, which smooths weekly volatility in the numbers, edged higher to 344,000.

Continuing claims, which run a week behind and total those who have filed for at least two weeks of benefits, also posted a healthy decline, dropping 97,000 to 2.71 million.

A notable change occurred in those receiving benefits under all programs.

That total, which runs through Sept. 18, dropped by 854,638, almost all of which came from pandemic-related programs and extended benefits. There are now 4.17 million workers getting benefits, compared with just over 5 million for the previous week and 24.6 million a year ago.

California accounted for a big chunk of the drop in initial claims, with a decrease of 10,513, according to unadjusted numbers. The District of Columbia saw a decline of 3,951 and Texas was down 3,099.

The report comes a day ahead of the Labor Department’s nonfarm payrolls tally for September. Economists expect that report to show an increase of 500,000 jobs and an unemployment rate decline to 5.1%.

Correction: Economists expect the Labor Department’s nonfarm payrolls tally for September to show an increase of 500,000. An earlier version misstated the figure.