U.S. jobless claims fall; reading clouded by processing snafu
WASHINGTON (Reuters) - The number of new U.S. jobless claims fell sharply last week but much of the decline appeared due to technical problems in claims processing, clouding the last major reading of labour market health before the Federal Reserve meets to consider reducing its stimulus for the economy.
Initial claims for state unemployment benefits slipped 31,000 to a seasonally adjusted 292,000, the Labour Department said on Thursday.
That was the lowest level of claims since 2006, confounding analysts' expectations for a mild increase.
But a department analyst said the majority of the decline appeared to be because two states were upgrading their computer systems and did not process all the claims they received during the week.
This is highly unusual, and the analyst declined to say which two states reported the problems. He said one of them was a large state and the other small.
It was likely that the unprocessed claims would appear in the following week's data, he said. All states submitted data for the week. Also potentially clouding last week's claims data, most offices and work sites in the country were closed for a holiday on Monday of last week.
Yields on long term U.S. government debt rose following the data's release, while the dollar cut losses against the yen and rose against the euro.
While the drop in claims should be taken with a grain of salt, it doesn't change the view that employers appear to have ended a long cycle of elevated layoffs that began around the 2007-09 recession.
"The decline might be partially determined by one-off factors," Annalisa Piazza, analyst at Newedge Strategy, said in a note. "That said, today's data certainly confirm that the U.S. labour market seems to be on a slow healing process."
The four-week moving average for new claims, which smooths out volatility, had in prior week's already fallen to its lowest levels since 2007. Last week, it fell by 7,500 to 321,250.
The downward trend has helped shape the view of Fed officials that the labour market is improving, and fuelled expectations the U.S. central bank will start reducing a massive monetary stimulus program as early as its policy meeting next week.
In a separate report, the Labour Department said U.S. export prices fell for the sixth straight month in August while prices for non-petroleum imports eased, signs of slack in global demand and in the domestic economy.
Export prices fell 0.5 percent during the month. Much of the drop was due to a sharp decline in prices for exports from the volatile farm sector, but non-agricultural exports declined as well and have decreased in every month since March.
The decline comes despite some recent signs that the European economy is getting back into gear following a recent recession.
Economists polled by Reuters had expected export prices to rise 0.1 percent last month.
Import prices also confounded analysts during the month, remaining flat. Economists in the Reuters poll had expected a 0.4 percent gain.
Import prices have trended lower over the last year, with the decline driven largely by the non-oil component. This pattern was also evident in August, with fuel import prices up 0.5 percent and non-petroleum prices down 0.2 percent.
Non-petroleum import prices have now declined every month since February, a sign that foreign producers have little leverage to raise prices for consumers.
This has helped keep the pace of inflation very low over the last year - so low that some U.S. Federal Reserve officials have expressed concern. Fed Chairman Ben Bernanke has warned that extremely low inflation raises the risk that the economy could fall into a vicious spiral of falling prices and wages known as deflation.
(Reporting by Jason Lange; Editing by Krista Hughes)
- Tweet this
- Share this
- Digg this
- Exclusive - Apple, Google agree to pay over $300 million to settle conspiracy lawsuit
- Ukraine forces kill up to five rebels, Russia starts drill near border |
- Boy and girl on Korean ferry drowned with life jackets tied together |
- Brazilian Congress passes Internet bill of rights
- Microsoft beats Wall Street on new CEO debut |