Initial claims for unemployment insurance opened the month of October with a reversal of most of prior week's rise and fell 12,000 to 308,000. The labor Department indicated that there were no special factors that distorted these readings.

The drop exceeded expectations for a decline to 316,000 claims and the four-week moving average of initial claims fell to 310,250 (-1.3% y/y).

A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last six years there has been a (negative) 78% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.

Continuing claims for unemployment insurance fell for the third week in the last four by a large 15,000 to 2,521. The drop added to the decline during the prior week which was revised from a slight increase. The latest declines suggest that the pace of rehiring may have picked up.

The continuing claims numbers lag the initial claims figures by one week.

The insured rate of unemployment was stable at 1.9%, off the peaks in August of 2.0% held for two consecutive weeks at month- end.