First-time claims for unemployment insurance for the week ending September 7 plunged 31,000 to 292,000, the lowest level since March 2006, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/091213.asp reported Thursday. Economists expected the number of claims to edge up to 330,000 from the 323,000 originally reported for the week ending August 31. The number of filings for that week was unchanged.[IMAGE]
The four-week moving average of first-time filings fell to 321,250, the lowest level since October 2007.
The strong numbers were affected in part by the Labor Day holiday as well as positive, low seasonal adjustment factors. The adjustment factors will begin to increase next week, and state offices will have had a full workweek to process claims that are filed by phone or via the Internet.
Continuing claims for jobless benefits--reported on a one-week lag--fell 73,000 to 2,871,000 for the week ending August 31, the lowest level since February 2008. The number of continuing claims for the week ending August 24 was revised down to 2,944,000 from the originally reported 2,951,000.
The four-week moving average of continuing claims dropped 24,750 to 2,953,000, the lowest since May 2008.
The week-over-week drop in initial claims was the largest since first-time claims fell 40,000 for the week ending April 6. According to the Bureau of Labor Statistics, two states installed new computer systems delaying processing of claims, contributing to the sharp decline.
Initial claims generally reflect layoffs, while continuing claims reflect hiring. A decrease in continuing claim suggests employers have a collective need for more workers, while an increase in first-time claims suggests companies may be overstaffed.
The claims reports will not have a direct impact on the employment situation release--which includes the unemployment rate--for September to be released on [COLUMN_BREAK]
October 4. That release will be based on employment and jobs data for the week of the month including the 12th calendar day.
Still, this week's claims data could, if sustained, mark an important shift in labor trends, although workers hired for summer jobs at retailers or restaurants and hotels could swell unemployment ranks when those jobs end with the close of the summer. Retail and restaurant and hotel jobs represented nearly half of the increase in employment in the last three months.
Nonetheless, the drop in initial claims could embolden the Federal Open Market Committee to begin to taper its monetary policy stimulus when it meets next week by cutting back on its purchase or mortgage-backed securities and or Treasuries.
The Labor Department said the total number of people claiming benefits in all programs for the week ending August 24 was 4,272,741, a decrease of 122,971 from the previous week. There were 5,391,420 persons claiming benefits in all programs in the comparable week in 2012.
No state was triggered ""on"" the Extended Benefits program during the week ending August 24. Extended benefits have been affected by the federal government sequestration. States responded to the reduced federal funds by either cutting the number of weeks of eligibility or lowering weekly payments.
According to the Bureau Labor Statistics, 11,316,000 persons were officially considered unemployed in August, with 4,290,000 ""long-term"" unemployed--that is, out of work for at least 27 weeks. Of those individuals counted as unemployed, 7.04 million were not receiving any form of government unemployment insurance for the week ending August 24, up from 6.92 million one week earlier.
The Labor Department reported 1,454,824 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending August 24, a decrease of 39,918 from the prior week. There were 2,223,071 persons claiming EUC in the comparable week in 2012. EUC benefits this year were directly threatened by the federal budget sequester.
According to the Labor Department detail, also reported on a one-week lag, largest increases in initial claims for the week ending August 31 were in Oregon (+1,085), Pennsylvania (+725), Nebraska (+609), New Jersey (+537), and Kansas (+394), while the largest decreases were in California (-4,988), Nevada (-2,125), New York (-1,259), Georgia (-1,221), and Florida (-884).
_Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 a.m. Eastern._