US initial claims rose 15,000 to 309,000 in the week ending September 14, only partially retracing the 29,000 drop to a revised 294,000 (was 292,000) the previous week and well below market expectations for a 330,000 reading.
A Labor Department analyst said that the processing of a backlog of claims created by disruptions related to computer system upgrades in two states that delayed the normal processing the previous week contributed to the increase in the latest week. The analyst said that it would likely take another week or two to fully work through the backlog.
The four-week moving average of initial claims dropped to 314,750, its lowest level since October 2007, from 321,750 the previous week. Continuing claims for the week ending September 7 dropped 28,000 to 2,787,000.
While the four-week moving average of claims hit a new cycle low in the latest week, which also happens to coincide with the reference week for the September payroll employment survey, the measure is likely still being biased lower as a backlog of claims created by disruptions to processing the previous week reportedly has not been fully worked through. This suggests claims could move still higher in the coming weeks. Our expectation, however, is that it will not reverse the improving underlying trend that has been in pace to date in 2013.
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