U.S. jobs market holds firm; factory activity slows a bit

Thu Oct 23, 2014 12:11pm EDT
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By Lucia Mutikani

WASHINGTON (Reuters) - New claims for U.S. unemployment benefits held below 300,000 for a sixth straight week last week, suggesting the labor market was shrugging off jitters over a slowing global economy.

Weakening growth in China and the euro zone, however, appears to be impacting the manufacturing sector, with other data on Thursday showing factory activity at a three-month low in early October. Even so, the sector was still moving forward at a healthy clip.

Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 283,000 for the week ended Oct. 18, the Labor Department said. That followed three straight weeks of declines, which had pushed claims to levels last seen in 2000.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell to its lowest level since May 2000.

"There is no sign in these very timely data of weaker global growth or turmoil in the markets causing U.S. growth to falter," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.

Separately, financial data firm Markit said its preliminary U.S. manufacturing purchasing managers index fell to 56.2 this month from 57.5 in September. A reading above 50 signals expansion in economic activity.

New orders growth eased markedly, with new export sales slowing sharply. Job growth, however, remained fairly robust.

"The source of the slowdown appears to be weaker economic growth in key markets such as the euro zone, China and other emerging markets, which has hit export performance," said Chris Williamson, chief economist at Markit in London.   Continued...

Richard O'Driscoll and his guide dog Maxwell leave the fourth Annual Job Fair for Individuals with Visual Impairments in Cambridge, Massachusetts October 16, 2014. REUTERS/Brian Snyder