Weekly US initial jobless claims landed at 197K, below the 200K forecast

• Initial claims a week earlier were first reported at 197K and then revised to 199K.
• Continuing claims stood at 1716K versus the 1708K that had been forecast.
• The previous continuing claims total was revised from 1701K to 1699K.

The latest readings continue to hug exceptionally low levels not seen over many generations. They rank among the strongest indications that the US labor market is healthy and that the Federal Reserve retains scope to raise interest rates.

New applications for unemployment insurance are tracked by US initial jobless claims, which are among the most timely windows into the labor market. The Labor Department normally publishes the figures on Thursdays at 8:30 a.m. Eastern time, giving a weekly look at layoffs in the intervals between monthly jobs reports.

The headline number comes with seasonal adjustment applied. In general, reduced claims suggest businesses are keeping hold of their staff, while a sustained increase can flag deteriorating conditions. For markets, what matters is how the reading compares with expectations: a better-than-expected figure can provide support for Treasury yields and the dollar, while a rise in claims can strengthen the case for easier Federal Reserve policy.

Any single week's data can be erratic. Holidays, severe weather, temporary plant shutdowns and problems with seasonal adjustment can create misleading moves. Traders therefore rely on the four-week moving average and on revisions to prior readings to see the underlying trend more clearly.

Also included in the release are continuing claims, which count people who have already filed an initial application and are still collecting benefits. Because that series arrives one week after initial claims, it gives a read on how fast the unemployed are landing new jobs. If the first-time claims number is low while the continuing tally stays elevated, the picture may be one of employers who are not shedding workers but are not adding them either.

It is important to remember, though, that claims fail to catch all of the jobless. Some workers never show up in the data because they do not qualify, have used up all their benefits or simply do not file. So a decline in continuing claims need not reflect a better hiring climate. The most reliable conclusion emerges when the path of claims lines up with payroll growth, unemployment and other demand-for-labor gauges.