Initial Jobless Claims Drop 4%; Still Skewed by Shutdown, Computer Issues

Initial jobless claims fell 4% to 358,000 for the week ending Oct. 12, according to a Labor Department report released today.

After jumping up a revised 21.1% the previous week due largely to the government shutdown impacting employees of government contractors and to California computer issues, this newest report continues to shed distorted light on the jobs picture. The now-ended shutdown will continue to impact numbers and California will continue to work its way through its initial claims backlog.. Analysts' expectations proved far off the mark, having expected just 330,000 initial claims.

For the week ending Oct. 5, about 70,000 furloughed federal employees sought unemployment benefits, although those people weren't included in the overall total.The states with the highest number of federal civilian employees applying for benefits were Maryland (17,368), Texas (7,191), Pennsylvania (4,416), Utah (3,978), and Washington (3,380).

Federal employees who receive back pay will likely have to reimburse the government if they claimed unemployment benefits during the two-week shutdown, although the law varies by state.

Source: Author, data from Labor Department. 

In the latest report, from a more long-term perspective, a 3.6% rise in the four-week moving average to 336,500 initial claims comes on the heels of a 6.5% hike, but these numbers have been skewed higher, as well. Regardless, both the latest week's claims and the four-week average fall significantly below 400,000, a cutoff point that economists consider a sign of an improving labor market.

On a state-by-state basis, not a single state recorded a decrease of more than 1,000 initial claims for the week ending Oct. 5 (most recent available data). For the same period, a whopping 19 states registered increases of more than 1,000 initial claims. California's huge 33,650 initial-claim increase was due primarily to its computer-related claims backlog, the same reason Michigan gave for its 4,070 increase.

-- Material from The Associated Press was used in this report.

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