Weekly Jobless Claims Fall By More Than Expected

First-time claims for unemployment benefits decreased by more than expected in the week ended September 5th, according to a report released by the Labor Department on Thursday, with the data indicating that the pace of firings continues to moderate.

The report showed that initial jobless claims fell to 550,000 from the previous week’s revised figure of 576,000. Economists had been expecting jobless claims to edge down to 560,000 from the 570,000 originally reported for the previous week.

With the bigger than expected 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 570,000 from the previous week’s revised average of 572,750.

Continuing claims, which measure the number of people receiving ongoing unemployment help, also declined in the week ended August 29th, the latest week for which the government has data.

While continuing claims fell to 6.088 million from the preceding week’s revised level of 6.247 million, Peter Boockvar, equity strategist for Miller Tabak, noted that evidence still suggests that the decrease has more to do with those 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 3.103 million in the week ended August 22nd, an increase of 73 thousand from the prior week.

The report also showed that those that are receiving extended benefits past the EUC fell by about 19 thousand to 439,000.

“Bottom line though, its clear that the pace of firings continue to moderate with the pace of hiring’s still in question,” Boockvar said.

Last Friday, the Labor Department released a separate report showing that employment fell by less than expected in the month of August, although the report also showed a much bigger than expected increase by the unemployment rate.

The report showed that non-farm payroll employment fell by 216,000 jobs in August following a revised decrease of 276,000 jobs in July. Economists had expected a loss of about 230,000 jobs compared to the loss of 247,000 jobs originally reported for the previous month.

While job losses continued in many of the major industry sectors, the Labor Department noted that the declines have moderated in recent months.

Despite the slower pace of job losses, the Labor Department also said that the unemployment rate jumped to 9.7 percent in August from 9.4 percent in July. With the increase, which exceeded economist estimates, the unemployment rate rose to a new 26-year high.