Initial claims for state unemployment insurance dropped last week but a backlog from reporting problems in California continued to skew the data.
New filings fell 15,000 to 358,000 from the prior week's six month high of 373,000 according to the Labor Department. Economists polled by Reuters had predicted 335,000 new claims.
A spokesman for the Labor Department cited elevated claims from California which has experienced problems and filing delays due to the conversion to a new computer system.
There was no obvious increase in claims from the 2 1/2 week partial government shutdown which ended last night as Congress agreed to increase the U.S. debt limit and restart the shuttered sections of the Federal government.
The four week moving average increased 11,750 to 336,500 in the first week of October. The past two weeks have seen a sharp increase in the moving average from the 312,700 weekly average in September. But it is likely that the reporting problems in California led to lower September totals as claimants were unable to file and who have since joined the unemployment rolls.
Unemployment claims have been on a downward trajectory for three years. In the summer they reached the levels below 340,000 per week usually associated with increasing job creation.
However, the numbers of jobs created each month in the non-farm payrolls lists from the late summer and early fall has actually declined, from an average of 207,000 in the first quarter, to 182,000 in the second and thus far to 137,000 in July and August.
The October 4th scheduled release of the September Employment Situation Report containing the payrolls, was delayed by the partial government closure. The Labor Department has not said when the figures will be issued.
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