WASHINGTON — Initial claims for U.S. state unemployment benefits saw a surprise plunge in the September 7 week, with "administrative issues" causing a decline of 31,000 to 292,000 - the lowest level in just over seven years, the Labor Department reported Thursday.
Meanwhile the level of continuing claims fell to a five-year low in the August 31 week.
In a week that was already shortened by the Labor Day holiday, a Labor Department analyst said no states were estimated, but that two of them - "one small and one larger" - carried out computer system conversions/upgrades that resulted in them processing less claims.
This played a major role in the fall in jobless claims, he said, and stressed that "this is not necessarily an indication of a change in labor market conditions."
"Expect to see some correction in the coming weeks," he said, as those claims are processed.
The analyst would not identify the two states in question.
Expectations for this week's report was for a claims level of 330,000, an increase of 7,000 from the 323,000 previously reported for
the August 31 week. Claims in that week were unrevised.
The last time initial jobless claims were this low or lower was in the April 1, 2006 week, when it came in at 291,000.
The initial claims seasonally adjusted 4-week moving average fell again in the Sept. 7 week, down 7,500 to 321,250. This is its lowest level since it was reported at 317,500 in the week of Oct. 13, 2007.
The Labor analyst said seasonal adjustment factors had expected a 6.2% drop in unadjusted claims, around 16,770, in the Sept. 7 week. Instead, unadjusted claims plummeted by 15.0%, or 40,250, to 228,399. That level is below the 299,729 level reported in the comparable week a year ago.
The state data released for the August 31 week indicated unadjusted initial claims increased in 19 states and declined in 34 states, with none unchanged. The District of Columbia, Puerto Rico, and Virgin Islands are included in this data.
The level of continuing claims came in at 2.871 million after seasonal adjustment in the August 31 week, a decline of 73,000 from the previous week. This is the lowest level since the week of March 1, 2008, when it came in at 2.867 million.
The level of unadjusted continuing claims plunged again, falling by 174,830 to 2,569,200 in the August 31 week, below the 2,930,825 level in the comparable week a year ago.
The seasonally adjusted insured unemployment fell to 2.2% in the August 31 from 2.3% in the August 24 week, remaining below the seasonally adjusted 2.6% rate in the comparable week a year earlier.
The unemployment rate among the insured labor force is well below that reported monthly by the Labor Department because claims are approved for the most part only for job losers, not the job leavers and labor force reentrants included in the monthly report.
The Labor Department said the level of unadjusted Emergency Unemployment Compensation benefits claims fell in the August 24 week, down 39,918 to 1,454,824.
The Labor Department reported that a total of 4,272,741 persons claimed unemployment benefits in the Aug. 24 week, a drop-off of 122,971 from the previous week, and below the 5,391,420 persons in the comparable week a year ago. These data are not seasonally adjusted, and include regular state claims, federal employee claims, new veterans claims, the EUC and extended benefits programs, state additional benefits, and STC/Workshare claims.
Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.