Ahead of tomorrow’s nonfarm payrolls report (which is expected to show a deceleration in jobs growth), initial jobless claims have been reversing lower in the past few weeks and are back down to the low end of the past several months’ range. At 228K, the seasonally adjusted number came in well below expectations which were anticipated to rise to 235K. Overall, claims continue to indicate a historically healthy labor market albeit with almost a year in the rearview since the absolute best levels.

On a non-seasonally adjusted basis, claims came in below 200K for the second week in a row. At 192.5K, claims are near similar levels to the comparable weeks of last year and 2017 through 2019. From a seasonal perspective, this week or next is likely to mark the annual low for claims before drifting higher through year-end.

Unlike initial claims, continuing claims were higher this week rising to 1.725 million which was a much larger increase than was forecasted. Regardless, claims remain at healthy levels even after rounding out a bottom and beginning to trend higher more recently.

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