Weekly Jobless Claims Fall, but Drop Attributed to Glitch
WASHINGTON -- The number of new U.S. jobless claims fell sharply last week but much of the decline appeared due to technical problems in claims processing, clouding the last major reading of labor market health before a Federal Reserve meeting.
Initial claims for state unemployment benefits slipped 31,000 to a seasonally adjusted 292,000, the Labor Department said Thursday. It was the lowest level of claims since 2006, confounding analyst expectations for a mild increase.
But a department analyst said the majority of the decline appeared to be because two states were upgrading their computer systems and did not process all the claims they received during the week. One of the states was large and the other small, the analyst said.
While the drop in claims should be taken with a grain of salt, it doesn't change the view that employers appear to have ended a long cycle of elevated layoffs that began around the 2007-09 recession.
That has helped shape the view of Fed officials that the labor market is improving, and fueled expectations the U.S. central bank will start reducing a massive monetary stimulus program as early as its policy meeting next week.
The four-week moving average for new claims, which smooths out volatility, had in prior weeks already fallen to its lowest levels since 2007. Last week, it fell by 7,500 to 321,250.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 73,000 to 2.871 million in the week ended Aug. 31.