Computer upgrades cut US jobless claims to 292K

Published on NewsOK Modified: September 12, 2013 at 8:13 am •  Published: September 12, 2013
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WASHINGTON (AP) — The number of Americans seeking unemployment benefits plummeted last week 31,000 to a seasonally adjusted 292,000. But the drop was mostly because of technical issues in two states that delayed the processing of applications.

The Labor Department said Thursday that the less volatile four-week average fell to 321,250, the lowest in six years.

A government spokesman says the steep drop occurred because two states upgraded their computer systems last week and did not process all their applications. "This is not necessarily an indication of a change in labor market conditions," he said.

The spokesman would not identify the states, but said one was small and one large. Big states like California and Texas can swing the weekly data by 10,000 or more.

Applications will likely rebound in the coming weeks, he said.

The broader trend in unemployment benefit applications has been favorable. Prior to the glitch applications had dropped 7 percent in the previous three months. However, the decline in jobless claims has not been followed by rapid hiring.

"It's hard to believe that claims can keep declining indefinitely without a commensurate pickup in job growth," said Dan Greenhaus, chief global strategist at BTIG. "Then again, that's exactly what they have done."

Applications are a proxy for layoffs. Layoffs have been falling since 2009 and in July reached the lowest level on records dating back to 2000, according to a separate government report released this week.

But unemployment remains painfully high at 7.3 percent more than four years after the Great Recession ended. And the economy grew at a modest 2.5 percent annual rate in the April-June quarter.