The latest estimate from JPMorgan and Goldman Sachs offers some relief: U.S. weekly jobless claims dipped to 217,000 for the week ending October 11, down from the prior week’s 235,000. That drop—calculated using partial state data—suggests layoffs may be easing, but the broader picture of the U.S. labour market remains subdued.
1. How the Estimate Was Calculated
Because a government shutdown has paused official data releases, economists leaned on unadjusted state filings and historical models to fill the gaps. Several states—Arizona, Massachusetts, Nevada, and Tennessee—didn’t submit data on time. To compensate, analysts applied seasonal adjustment factors and assumptions based on prior trends.
Goldman’s model produced a range between 211,000 and 225,000 depending on how it treated those missing states. JPMorgan’s economist Abiel Reinhart called the reading “quite decent,” saying it suggests layoffs remain low with modest movement on unemployment.
2. What It Says About the Labor Market
At first glance, falling jobless claims would hint at strength. But here’s the nuance: while layoffs may be easing, hiring activity has cooled sharply. Officials including Fed Chair Jerome Powell have described the U.S. labour market as being in a “no hire, no fire” zone—low churn, limited momentum.
Continuing claims—those still collecting benefits after their initial week—are hovering around 1.9 million, signalling that many who lose jobs aren’t landing new ones quickly. The unemployment rate, last reported at 4.3%, remains near a four-year high.
In short: the report is more about stability than strength. Layoffs aren’t spiking, but hiring is too weak to drive real improvement.
3. Why JPMorgan & Goldman Sachs Estimates Matter
Normally, the U.S. Department of Labor delivers official claims data every week—and markets respond. But in a data blackout, analysts at major banks become de facto sources. Their models influence how traders, policymakers, and business leaders read the labor market in real time.
For the Federal Reserve, these estimates are especially critical. The central bank uses jobless claims as a real-time signal of labour pressure when setting rates. With no fresh official data, internal forecasts from JPMorgan and Goldman carry extra weight heading into the Fed’s next meeting.
4. Risks & Caveats to the Estimate
- Data gaps: missing numbers from several states make the estimate inherently uncertain.
- Shutdown distortion: the government shutdown complicates timing, classifications, and reporting.
- Seasonal assumptions: models depend on assumptions that past patterns will hold, which isn’t always safe.
- Muted hiring: even with lower claims, future claims might not fall further if companies continue to withhold hiring.
5. What to Watch Next
- Official data restoration: once the government reopens, actual claims numbers may confirm or defy these estimates.
- Payroll reports: October nonfarm payrolls will give more clarity on hiring momentum.
- Fed signals: the central bank’s tone on future rate moves may hinge on how claims data evolve.
- Labor demand proxies: job openings, wage growth, and business surveys will help fill in the picture.
6. Key Takeaways for Investors & Observers
- The decline to 217,000 suggests layoffs remain moderate.
- But hiring softness still drags on the market’s upside potential.
- With official data paused, estimates from banks are pulling double duty.
- The Fed will be watching closely—and markets may discount policy shifts until clarity returns.
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The most recent estimates from JPMorgan and Goldman Sachs might lean optimistic, but the labour market isn’t flashing green just yet. We’re navigating a zone of inertia: no big layoffs, no big hiring. Until more reliable data returns, every bit of signals and nuance counts.
