Initial jobless claims fell to 326,000 for the first drop in four weeks

The number of Americans filing initial unemployment claims for the first time in four weeks fell as more workers returned to the workforce after supplemental unemployment benefits expired.

First-time jobless filings fell 38,000 to 326,000 in the week ending October 2, according to the Labor Department. Analysts polled by Refinitiv had expected a drop to 348,000.

“After three consecutive weekly increases, new jobless claims have finally moved to the downside,” said Mark Hamrick, chief economist at Bankrate. “The drop from 38,000 to 326,000 in new seasonally adjusted claims puts it just above the pandemic-era low a month ago.”

Continuing claims for the week ending September 25 fell to a pandemic-era low of 2.714 million, down from the previous week’s upwardly revised 2.811 million. Analysts had expected a reading of 2.78 million.

The further decline in continuing claims comes less than three weeks after the expiration of $300 a week in supplemental unemployment benefits.

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About 4.17 million Americans received some form of unemployment assistance, down more than 854,000 from the previous week. More than 24.6 million Americans applied for benefits during the comparative week in 2020.

The better-than-expected report sets the stage for the September non-farm payroll report which is due for release on Friday. Economists expect the statement to show that 500,000 Americans found jobs last month as the unemployment rate fell to 5.1%. This would be an improvement from the 235,000 jobs added in August.

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