Initial U.S. jobless claims drop by 12,000 to 214,000

Oct. 20 (UPI) -- U.S. initial jobless claims fell by 12,000 to a seasonally adjusted 214,000 for the week ending Saturday, according to the Department of Labor.

The four-week moving average for initial claims was 212,250, up 1,250 from the previous week's average.

The total number of people collecting unemployment benefits for the week ending Oct. 8 was 1,385,000, an increase of 21,000 from the previous week.

The new unemployment filing numbers edged up over the last month but the numbers show a continuing tight labor market.

But as the Federal Reserve continues raising interest rates to fight inflation, that tight labor market could possibly be headed for a recession in 2023.

On Tuesday, Fitch Ratings put out a report that said it's likely the United States will enter a mild recession this coming spring. Fitch said that while the strong labor market will cushion the recession blow, the interest rate hikes will cut consumer demand and eventually will slow job creation.

If a recession comes, it's unlikely that it will only happen in the United States. The World Bank analysis in September said rising interest rates around the world combined with market conditions could lead to a global recession next year.

These economic conditions are reflected in volatility in the equity markets, worrying investors that a recession is looming.

On the inflation front, it's not just retail inflation but wholesale prices as measured in the producer price index. That could be a sign that inflation has become persistent.