- Robert Stein, deputy chief economist at First Trust Portfolios LP
The number of Americans seeking unemployment benefits increased last week, yet remained near the lowest level in 14 years, adding to further evidence of improving labour market. Initial claims for jobless benefits rose by 17,000 to a seasonally adjusted 283,000 in the week ended 18 October, the Labor Department reported. The reading came in slightly higher economists' forecasts for the 282,000 claims. Also, unemployment claims for the preceding week were revised upwards by 2,000 to show 266,000. The four-week moving average for initial claims, which is considered to be a better gauge as it smooths out week-to-week volatility, dropped 3,000 to 281,000, the lowest level since May 2000. Adjusted for population growth, initial claims are hovering around the all-time low. The low level indicates increased optimism on the part of employers as the economic recovery gains momentum. Employers are now less likely to lay off employees, though they have also become more cautious about hiring new ones.
A tepid jobs recovery since the recession has accelerated this year. Payrolls have risen an average 227,000 a month through September, putting 2014 on track to be the year of strongest job creation since the late 1990s. The Fed officials have reiterated their pledge to keep interest rates at their current level near zero for a "considerable time" to prop up an ongoing recovery in the labour market.
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