US weekly jobless claims come in at 197K, beating expectations

• The prior reading was 196K, later revised upward to 198K.
• Continuing claims stood at 1719K versus a forecast of 1745K.
• The preceding continuing claims figure was 1730K, revised down to 1717K.

Initial claims in the US totaled 197K, below the 201K economists had projected, underscoring the labor market's ongoing resilience. Although the previous week's figure was adjusted up to 198K from 196K, claims remain near multi-decade lows, indicating layoffs are still contained.

Continuing claims presented an even stronger picture, falling to 1.719 million, well under the 1.745 million that was expected. The earlier reading was revised to 1.717 million from 1.730 million. Together, the figures indicate a healthy US jobs market, allowing the Fed to maintain its singular focus on inflation.

Initial claims offer a high-frequency measure of how many individuals are newly filing for unemployment benefits. A modest level of claims generally suggests companies are not resorting to widespread job cuts. The fall in continuing claims is also noteworthy, as it suggests that those who have lost jobs are relatively quickly securing new roles.

Market reaction has been muted because the strong claims data do not alter the existing outlook. Investors already recognize the stability of the US labor market, so only a deterioration would shift that view.

Yesterday's US PMI figures also pointed to labor market strength. S&P Global said employment climbed sharply in September, with job creation reaching its fastest pace in more than four years, since June 2022. The gains were broad-based across manufacturing and services, as businesses took on more workers to accommodate stronger demand and rising backlogs.