Jobless Claims Better Than Expected Last Week, September’s Employment Report Cancelled

The number of Americans filing for first-time jobless benefits last week rose less than expected, keeping claims near six-year lows in the face of the now happening government shutdown. The weekly report came just ahead of the official news that the non-farms payroll report for September will not be delivered on Friday because of the government shuttering key offices.

The Labor Department said that the number of initial jobless claims for the week ended September 28 was 308,000, up slightly from a revised figure of 307,000 the week prior (revised up from 305,000).  The latest figure was smaller than the 313,000 claims that economists predicted.

The four-week moving average, a less volatile measure of labor trends, dropped by 3,750 a week earlier to 305,000. That’s the lowest level for the one-month average since May 2007.

The report shows that employers were surprisingly resilient in maintaining their staff in the days before the government was staring at a shutdown if a budget couldn’t be reached. As most of the world knows, a budget agreement wasn’t met and the government is now in its third day of a partial shutdown. Employees that file for claims during furlough can impact figures in coming weeks.

Continuing claims, or those people already collecting benefits on the state level, for the week ended September 21 climbed to 2.925 million from 2.821 million a week earlier.  Continuing claims are reported at a one-week lag compared to initial claims.

Total claims, which reflect the number of people collecting benefits from all state and federal programs, for the week ended September 14 increased to 4.002 million from 3.921 million. Total claims are reported at a two week lag to initial claims.

The state posting the greatest increase in claims were Oregon (+489), New Jersey (+327) and Massachusetts (+306). The greatest decreases were posted in California (-3,754), Georgia (-2,719) and New York (-2,376).

As mentioned, the government has now said that the heavily watched employment situation report that was scheduled for Friday will not be delivered this week as a result of the shutdown. In August, the unemployment rate dropped to 7.3 percent from 7.4 percent in July, not because of a great number of job additions, but because more people gave up looking for work. For August, the nation added 169,000 new jobs as July’s additions were revised all the way dwon to 104,000 from an original estimate of 162,000.  June’s figure was also revised, lowered to 172,000 from 188,000. Economists were expecting the unemployment rate to hold steady at 7.3 percent and for 182,000 new jobs in September.

On Wednesday, ADP estimated that private employers added 166,000 staffers in September after a downwardly revised 159,000 in August. Investment research firm TrimTabs chimed-in today on CNBC saying that it believes the U.S. created only 159,000 new jobs in September.

The markets are diving for the second straight day, with the Dow on track for its ninth fall in 11 sessions. Just after noon Eastern, the Dow is off by 180 points, the S&P 500 is lower by 22 points and the Nasdaq is flat.