WASHINGTON — Initial claims for U.S. state unemployment benefits were much higher than expected in the October 5 week, rising by 66,000 to 374,000 on special factors, the Labor Department reported Thursday.

A Labor Department analyst noted that California is still working through the backlog created by computer issues that is had in early September. The accounted for roughly half of the seasonally adjusted increase.

In addition, roughly 15,000 of the 66,000 seasonally adjusted rise can be attributed to increased filings from non-federal government workers, such as contractors, that have been affected by the federal shutdown. This impact was seen in "several states," the analyst said. It is likely that claims will continue to rise for this segment of workers the longer that the shutdown continues.

Expectations for this week's report were for a claims level of 311,000, an increase of 3,000 from the unrevised 308,000 level in September 28 week.

The analyst said that seasonal adjustment factors had expected a 10.1% rise in unadjusted claims, or roughly 25,593, in the October 5 week. Instead, unadjusted claims rose 33.5%, or 84,616, to 336,849. That level is now above the 329,919 level reported in the comparable week a year ago.

The initial claims seasonally adjusted 4-week moving average rose 20,000 to 325,000 in the October 5 week after falling in each of the previous five weeks.

The state data released for the September 28 week indicated unadjusted initial claims increased in 22 states and declined in 31 states, with no states unchanged. The District of Columbia, Puerto Rico, and Virgin Islands are included in this data.

The level of continuing claims came in at 2.905 million after seasonal adjustment in the September 28 week, a decline of 16,000 from the previous week.

The 4-week moving average for continuing claims rose 22,500 to 2.859 million.

The level of unadjusted continuing claims fell 36,220 to 2,478,333 in the September 28 week, below the 2,785,230 level in the comparable week a year ago.

The seasonally adjusted insured unemployment held steady at 2.2% in the September 28 week, still well 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 that the level of unadjusted Emergency Unemployment Compensation benefits claims fell 27,543 to 1,442,484 in the September 21 week.

There were 19,918 Federal Government employees receiving benefits in the September 21 week, prior to the start of the shutdown. That number should rise in the coming weeks. These filings are separate from the headline count.

The Labor Department reported that a total of 4,028,411 persons claimed unemployment benefits in the September 21 week, a 25,956 rise from the previous week, but still well below the 5,044,649 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.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.