MACRO: Initial jobles claims fell, 15k below estimates

Initial jobless claims fell by 13,000 to 216,000 in the week ended Sept. 2, the Labor Department said Thursday.

This is the lowest level since mid-February. Economists polled by The Wall Street Journal had estimated new claims would rise 2,000 to 230,000. Last week, claims fell a revised 3,000 to 229,000. That compared with the initial estimate of a decrease of 4,000 to 228,000.

The last time jobless claims dropped this low was Feb. 11, marking the fourth straight weekly decline.

Bloomberg reported that the softening labor market has proved a vital support to the economy. Solid hiring and limited layoffs have given consumers the wherewithal to keep spending, fueling optimism that the US can skirt a recession.

“The claims data are a reminder that labor market conditions may be cooling, but that the labor market is still tight,” Nancy Vanden Houten, lead US economist at Oxford Economics, said in a note.

While the Federal Reserve is likely to hold the line on interest rates at this month’s policy meeting, “more moderation in job growth will be needed to keep rate hikes further down the road off the table,” Vanden Houten said.

The latest figure “suggests layoffs remain only scattered and selective. The job market is slowing, but not quickly enough to cause a broad wave of layoffs. Downside risks persist and jobless claims could start flashing yellow or even red once this summer’s stronger-than-expected activity passes.”

— Eliza Winger, economist