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U.S. Weekly Jobless Claims Unexpectedly Drop To 305,000

U.S. Weekly Jobless Claims Unexpectedly Drop To 305,000

While the data may be taken with a grain of salt in light of recent technical issues, the Labor Department released a report on Thursday showing that first-time claims for U.S. unemployment benefits unexpectedly decreased in the week ended September 21st.

The report said initial jobless claims fell to 305,000, a decrease of 5,000 from the previous week's revised figure of 310,000.

The modest decrease came as a surprise to economists, who had expected jobless claims to climb to 325,000 from the 309,000 originally reported for the previous week.

The jobless claims data in recent weeks was impacted by computer system upgrades in California and Nevada, but the Labor Department said the latest report is clean.

The Labor Department also said the less volatile four-week moving average dropped to 308,000, a decrease of 7,000 from the previous week's revised average of 315,000.

The decrease extended a recent downward trend by the four-week moving average, which fell to its lowest level since June of 2007.

Meanwhile, continuing claims, a reading on the number of people receiving ongoing unemployment assistance, rose to 2.832 million in the week ended September 14th from the preceding week's revised level of 2,788,000.

The four-week moving average of continuing claims dropped to 2,842,500, a decrease of 42,750 from the preceding week's revised average of 2,885,250.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "Bottom line, the pace of firings continue to drop which is certainly very encouraging."

"Seeing a more pronounced pick up in hiring's though is a different story and will likely remain the case as long as CEO's continue to have limited visibility in their business," he added.

Next Friday, the Labor Department is scheduled to release its closely watched monthly jobs report for the month of September.

Noting that the relatively weak job growth seen in July and August does match up with other indicators suggesting improving labor market conditions, Capital Economics said there may be "some significant upside risk to the current consensus forecast that September's payrolls increased by a modest 177,000."

"Sticking our necks out (perhaps foolishly), we forecast a 220,000 gain," Capital Economics said in a research note.

by RTT Staff Writer

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