After last week’s figure of first time filings for jobless benefits dipped below 300,000 because of two states undergoing computer system upgrades, initial jobless claims rose last week, but less than expected. It’s still a cautionary tale because the numbers still could be depressed as employment agencies in California and Nevada are still working through a backlog of applications. The Labor Department said it could be another couple weeks before the applications are all processed.
To that end, the Labor Department reported that initial jobless claims, which reflect weekly layoffs, for the week ended September 14 rose to 309,000 from a revised 294,000 the week prior (revised up from 292,000). The number was far short of the 338,000 that economists predicted, but as mentioned, the numbers still seem to lack a complete set of data.
The four-week moving average, typically regarded as a better measure of labor trends because it flattens out weekly volatility, dropped by 7,000 to 314,750 from the slightly revised 321,750 (from 321,500) a week earlier. The one-month average has been holding for several weeks now at its lowest level since October 2007. Claims below 350,000 are largely viewed as a modestly improving jobs market.
Continuing claims, or the number of people already collecting state benefits, dropped by 28,000 to 2.787 million in the week ended September 7. Continuing claims are reported at a one-week lag to initial claims.
Total claims, or the number of people receiving benefits from all state and federal programs, declined by 235,250 to 4.038 million. Total claims come at a two-week lag. Compared to the same time in 2012, total claims are down by about 22 percent.
The states posting the biggest increases in claims last week were Tennessee (+681), Oklahoma (+601) and Mississippi (+298). The largest decreases were in California (-25,412), New York (-2,260) and Florida (-1,808). 40 states and territories reported a decline in claims, while 13 posted increases.
California, the nation’s most populated state, and Nevada still muddling through their new software can certainly have an impact on some future revisions, but overall claims are holding at low levels and look encouraging. On Wednesday, the Federal Reserve surprised most by deciding to forego tapering its extraordinary stimulus package at the moment, perhaps a signal that the main bank is still concerned about labor conditions in the U.S. Initial claims are remaining low, indicating the employers are comfortable keeping staff, but they aren’t hiring additional workers at the same time. In August, the U.S. only added 169,000 new jobs and June and July figures underwent sharp revisions, including July’s figure plunging to only 104,000 new jobs. The unemployment rate ticked down to 7.3 percent, but only because more people gave up actively seeking employment.
The markets celebrated the Fed bypassing tapering in September with a rally to new all-time highs on Wednesday. Stocks are taking a bit of a breather, trending around flat levels in early action with the Dow down by 9 points, the S&P 500 up 1 point and the Nasdaq ahead by 5 points.
[Image Courtesy of Wikimedia Commons]