US DATA: Solid Improvement Across Initial And Continuing Jobless Claims

Initial jobless claims surprised to the downside in the week of Sep 20, at 218k (233k consensus, 232k prior rev up by 1k). This was the lowest number of initial claims in 9 weeks, and brought the 4-week average down to a 3-week low 238k. 

• The prior weeks are still exaggerated to the upside by the fraud-related jump in Texas this month. The relative drop in national initial claims was helped by Texas claims falling 6.9k, settling back closer to their usual range, at 20.1k NSA (the prior 27k and 32k were minimally revised despite some speculation that they could be updated to remove the apparently fraudulent claims maid earlier in the month).
• Meanwhile continuing claims sustained their recent retracement lower, to 1,926k (1,932k consensus, 1,928k prior albeit rev up by 8k). This marked the lowest in 16 weeks.
• Outside of the fact that the headline readings show a solid improvement in labor market conditions, it's actually a fairly unremarkable report. On an NSA basis, claims dropped to 15k to 181k (vs 14k drop SA), with continuing NSA dropping 32k (vs 2k drop SA).
• As that suggests, this is a pretty typical seasonal move for initial claims (arguably the drop in Texas overestimates the sequential improvement by a few thousand), with the drop in continuing a little less than usual for this week of the year.