The 5k U.S. initial claims drop to 249k
The 5k U.S. initial claims drop to 249k in the first week of October more than reversed last week's 3k uptick to 254k from 251k in the BLS survey week to leave claims just above the 42-year low of 248k in April, and well below the 294k one-year high in May. Claims have consistently tightened through 2016 despite moderating payroll growth and diminished rate of decline in the jobless rate, beyond gyrations the figures around the Easter and auto-retooling distortions. Claims are entering October below the lean 254k September average, versus higher prior averages of 262k in August, 260k in July, and 265k in June. The 251k September BLS survey week reading sat below the 262k August figure, 252k in July, and 258k in June. Analysts still expect a 170k September nonfarm payroll gain, as analysts discuss in Monday's commentary, with upside risk from tight claims. Payrolls face a producer sentiment downdraft since July via a continued inventory headwind and a vehicle sector pull-back, though vehicle sales bounced 4.2% to a 17.6 M clip in September despite a likely small assembly rate pullback from the 12.3 M August clip. Payrolls face neutral risk from a flat trend for the full mix of consumer confidence measures and a tame 154k September ADP rise.