WASHINGTON: The number of Americans filing new claims for jobless benefits appeared to drop to a near seven-and-a-half year low last week but the decline was driven by two states that had trouble processing filings, making it difficult to get a clear read on the health of the labour market.
Initial claims for state unemployment benefits dropped 31,000 to a seasonally adjusted 292,000, the lowest level since April 2006, the Labour Department said yesterday. The department attributed much of the decline to computer problems in two states - one small and the other large.
The department declined to identify the states, but a spokeswoman for California’s unemployment insurance office said problems upgrading a computer system there had delayed the processing of about 20,000 claims. The spokeswoman said the backlog has since been cleared. Initial claims had already fallen to pre-recession levels, and details of the report that were not affected by technical glitches suggested the labor market continued to improve.
“While the information value of this week’s report looks limited, claims have been signaling an improving labor market,” said Jim O’Sullivan, chief US economist at High Frequency Economics in Valhalla, New York.
The number of people still receiving benefits under regular state programs after an initial week of aid tumbled 73,000 to 2.87 million in the week ended August 31. That was the lowest since March 2008. In addition, the share of unemployed people who received benefits during that week hit its lowest level since May 2008. “We expect this trend to persist, despite the potential for near-term volatility surrounding the administrative issues that arose this week,” said Cooper Howes, an economist at Barclays in New York.
In a separate report, the Labour Department said US export prices fell for a sixth straight month in August while prices for non-petroleum imports declined, signs of slack in global demand and in the domestic economy. Export prices fell 0.5 percent. Much of the drop was due to a sharp decline in prices for exports from the volatile farm sector. Reuters
