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Thursday morning, the Labor Department released its report on initial jobless claims in the week ended September 19th, showing that first-time claims for unemployment benefits unexpectedly decreased compared to the previous week.
The report showed that jobless claims fell to 530,000 from the previous week's revised figure of 551,000. Economists had been expecting jobless claims to edge up to 550,000 from the 545,000 originally reported for the previous week.
With the unexpected decrease, jobless claims fell to their lowest level since mid-July, when seasonal issues in the auto sector skewed the data artificially lower. Excluding the July data, jobless claims were at their lowest level since early January.
Additionally, the Labor Department said that the less volatile four-week moving average edged down to 553,500 from the previous week's revised average of 564,500.
Continuing claims, which measure the number of people receiving ongoing unemployment help, also declined in the week ended September 12th, the latest week for which the government has data.
While continuing claims fell to 6.138 million from the preceding week's revised level of 6.261 million, Peter Boockvar, equity strategist for Miller Tabak, noted that evidence still suggests that the decrease has more to do with people not finding new jobs and exhausting their benefits.
Boockvar pointed to another increase in the number of people claiming Emergency Unemployment Compensation (EUC), which rose to a new record high of 3.224 million in the week ended September 5th, an increase of 82 thousand from the prior week.
The report also showed that those that are receiving extended benefits past the EUC rose by about 3 thousand to 438,000.
Boockvar said, "This is evidence that many people that are falling out of the Continuing Claims category is not because they found a new job but because they've exhausted their initial 26 weeks of benefits."
"So the trend continues, a slowdown in the pace of firing but a reluctance on the part of businesses to hire," he added.
Next Friday, the Labor Department is due to release its report on employment in the month of September. Economists expect the report to show a continued slowdown in the pace of job losses.
While non-farm payroll employment is expected to fall by about 188,000 jobs in September following a decrease of 216,000 jobs in August, the unemployment rate is expected to edge up to a new twenty-six year high of 9.8 percent.
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