WASHINGTON — The U.S. initial unemployment claims reading of 358,000 in the October 12 week probably is providing a "false signal" about underlying labor market trends, and instead reflects the temporary effects of the U.S. government closing on private jobs. Still, this implies that October payrolls could come on the weak side of recent readings.

Initial claims were down 15,000 and the still-high 358,000 level is likely to decline sharply ahead after two weeks of elevation. It compares to 311,000 in mid-September and this is the main reason to expect a poor showing for October payrolls.

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