US jobless claims fall as reading distorted by processing problems
The number of Americans filing new claims for jobless benefits appeared to drop to a near 7-1/2-year low last week but the decline was driven by two states that had trouble processing filings, making it difficult to get a clear read on the health of the labour market.
Initial claims for state unemployment benefits dropped 31,000 to a seasonally adjusted 292,000, the lowest level since April 2006, the Labour Department said today.
The department attributed much of the decline to computer problems in two states - one small and the other large.
The department declined to identify the states, but a spokeswoman for California's unemployment insurance office said problems upgrading a computer system there had delayed the processing of about 20,000 claims. The spokeswoman said the backlog has since been cleared.
Initial claims had already fallen to pre-recession levels, and details of the report that were not affected by technical glitches suggested the labour market continued to improve.
"While the information value of this week's report looks limited, claims have been signalling an improving labour market," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.
The number of people still receiving benefits under regular state programs after an initial week of aid tumbled 73,000 to 2.87 million in the week ended August 31. That was the lowest since March 2008.
In addition, the share of unemployed people who received benefits during that week hit its lowest level since May 2008.
"We expect this trend to persist, despite the potential for near-term volatility surrounding the administrative issues that arose this week," said Cooper Howes, an economist at Barclays in New York.
The data had little impact on Wall Street, where stocks were trading lower around midday.
EXPORT PRICES FALL
The downward trend in jobless claims has helped shape the view of Federal Reserve officials that the labour market is improving, and has helped fuel market expectations the U.S. central bank will start reducing a massive bond buying program at a policy meeting next week.
In a separate report, the Labour Department said U.S. export prices fell for a sixth straight month in August while prices for non-petroleum imports declined, signs of slack in global demand and in the domestic economy.
Export prices fell 0.5pc. 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 decrease comes despite recent signs the European economy is getting back into gear following a recession.
On the import side, prices have trended lower over the last year, with the decline driven largely by the non-oil component. This pattern was evident again in August, with fuel import prices up 0.5pc and non-petroleum prices down 0.2pc.
Non-petroleum import prices have now declined every month since February, a sign that foreign producers have little leverage to raise prices for consumers.