Jobless claims climb 7,000 to 214,000 in early October

The numbers: The number of Americans who applied for unemployment benefits rose modestly in early October, but they remain close to levels last seen in the late 1960s.

Initial jobless claims, a rough way to measure layoffs, climbed 7,000 to a seasonally adjusted 214,000 in the seven days ended Oct. 6.

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Economists surveyed by MarketWatch had predicted a 205,000 reading.

The monthly average of new claims, meanwhile, increased by 2,500 to 2,500, the government said Thursday.

What happened: The aftereffects from Hurricane Florence could still be in play, but raw or unadjusted claims figures gave little hint as to why layoffs rose in early October.

The number of people already collecting unemployment benefits, meanwhile, edged up by 4,000 to 1.66 million. Known as “continuing” claims, they are near a 45-year low.

The low level of layoffs reflects the tightest labor market in half a century. Job openings are at a record high and unemployment is at 48-year bottom of 3.7%.

Big picture: The plunge in the stock market on Wednesday doesn’t mean the economy is about to go south. Far from it.

Investors are anxious about the Federal Reserve raising interest rates, but the central bank is doing so because the economy has been so strong. Households are in the best financial shape in years and businesses can’t hire enough people to keep up with rising sales.

Even if the Fed keeps raising rates as expected, though, they are likely to remain historically low. Eventually higher rates will start to bite, but it probably won’t be till next year at the earliest.

Market reaction: The Dow Jones Industrial Average DJIA, -3.15% and S&P 500 SPX, -3.29%were set to open lower in Thursday trades after a bruising session the previous day. The Dow sank 831 points and has been in full retreat after setting a record high late last week.

The 10-year Treasury yield TMUBMUSD10Y, -0.27% fell slightly to 3.18%, but it remains at a seven-year peak. Higher inflation and pending Fed rate hikes have pushed yields higher and driven stock prices lower.

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