WASHINGTON (MNI) - Initial claims for U.S. state unemployment benefits were much lower than forecast in the September 21 week, dropping 5,000 to 305,000, the Labor Department reported Thursday.

Expectations for this week's report was for a claims level of 330,000, an increase of 21,000 from the previously reported 309,000 level in the September 14 week. The initial claims level in that week was revised slightly higher to 310,000.

The initial claims seasonally adjusted 4-week moving average dropped to 308,000, the lowest level since June 2007.

A Labor Department analyst said that there was nothing unusual in the data, adding that states which had not been "caught up" with initial claims processing due to computer system conversion/upgrade issues had now done so.

He added, however, that California was still "working through" the same issues for its continuing claims data.

The state data indicated that unadjusted initial claims increased in 38 states and declined in 15 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 2.823 million after seasonal adjustment in the September 14 week, an increase of 35,000 from the previous week.

The level of unadjusted continuing claims fell 41,762 to 2,464,570 million, following the 2.841 million level the comparable week a year ago.

The seasonally adjusted insured unemployment ticked up to 2.2%, 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 rose 32,563 to 1,348,526 in the September 7 week.

The Labor Department reported that a total of 3,921,399 persons claimed unemployment benefits in the September 7 week, an increase of 22,769 from the previous week, and still well below the 5,173,998 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.

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