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U.S. Weekly Jobless Claims Pull Back Below 1 Million

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A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits tumbled by more than expected in the week ended August 29th.

The Labor Department said initial jobless claims declined to 881,000, a decrease of 130,000 from the previous week's revised level of 1.011 million.

Economists had expected jobless claims to drop to 950,000 from the 1.006 million originally reported for the previous week.

However, Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics, noted the decrease in jobless claims was largely due to a shift by the Labor Department to a new seasonal adjustment process.

"Total [not seasonally adjusted] claims, including claims for [Pandemic Unemployment Assistance] benefits were 1.59 million, up from 1.43 million last week," Vanden Houten said.

She added, "The data show that layoffs remain widespread and the recovery in the labor market is occurring at a frustratingly slow pace."

The Labor Department said the less volatile four-week moving average fell to 991,750, a decrease of 77,500 from the previous week's revised average of 1,069,250.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also plunged by 1.238 million to 13.254 million in the week ended August 22nd.

"Despite the large drop, continuing claims are more than twice the peak of the Great Recession," Vanden Houten said.

The four-week moving average of continuing claims slumped to 14,496,250, a decrease of 709,000 from the previous week's revised average of 15,205,250.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for August, with employment expected to surge up by 1.4 million jobs.

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