US: Slowdown in job growth should continue – Wells Fargo

The weekly jobless claims report showed that initial claims fell to 751K last week, a larger number than expected. According to analysts at Wells Fargo, the trend remains modestly downward. They point out total benefit recipients remain elevated at 22 million, with more workers receiving extended benefits amid long jobless spells. 

Key Quotes: 

“Despite a flurry of high-profile layoff announcements around the start of the month, the trend in initial claims for regular benefits has been little changed, inching only modestly lower.”

“The reduction in claims over the past month points to further job gains in tomorrow’s October payroll report, but we expect the pace to continue to slow with “only” 530K jobs added. That would leave payrolls still more than 10M short of February levels.”

“With virus cases rising again across most the country, we expect claims to remain stubbornly high as localized restrictions and more caution among consumers weigh on employment.”