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U.S. Jobless Claims Come In Above Estimates But Continue To Be Distorted

U.S. Jobless Claims Come In Above Estimates But Continue To Be Distorted

First-time claims for U.S. unemployment benefits fell by less than expected in the week ended October 19th, according to a report released by the Labor Department on Thursday, although the data continued to be distorted.

The report said initial jobless claims dropped to 350,000, a decrease of 12,000 from the previous week's revised figure of 362,000. Economists had expected claims to fall to 340,000 from the 358,000 originally reported for the previous week.

Jobless claims fell for the second consecutive week, partly offsetting the substantial jump that was seen in the week ended October 5th.

However, the Labor Department said the data continued to be impacted by a claims backlog in California as well as the government shutdown.

Jay Morelock, an economist at FTN Financial said, said, "All in all, with California distorting the headline number alongside a lack of clarity around the government shutdown, this report fails to deliver much useful information."

The report showed that the less volatile four-week moving average rose to 348,250, an increase of 10,750 from the previous week's revised average of 337,500.

Meanwhile, continuing claims, a reading on the number of people receiving ongoing unemployment assistance, dipped to 2.874 million in the week ended October 12th from the preceding week's revised level of 2.882 million.

The four-week moving average of continuing claims climbed to 2,894,750, an increase of 13,250 from the preceding week's revised average of 2,881,500.

On Tuesday, the Labor Department released a separate report showing that U.S. employment increased by much less than expected in the month of September.

The report said non-farm payroll employment increased by 148,000 jobs in September compared to economist estimates for an increase of about 180,000 jobs.

Despite the weaker than expected job growth, the unemployment rate dipped to 7.2 percent in September from 7.3 percent in August. Economists had expected the unemployment rate to come in unchanged.

With the unexpected decrease, the unemployment rate fell to its lowest level since hitting 6.8 percent in November of 2008.

The September jobs report was originally scheduled for release on October 4th but was delayed as a result of the government shutdown.

by RTT Staff Writer

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