Initial Claims for State Unemployment Benefits Fall to 8-Week Low

The number of Americans filing new applications for unemployment benefits fell last week to the lowest level in eight weeks for the week ended Sept. 12. Initial claims for state unemployment benefits, otherwise known as weekly jobless claims or the firing rate, fell 11,000 to a seasonally adjusted 264,000, the Labor Department said on Thursday.

That’s the lowest reading since the week ended July 18, and was the 28th straight week that claims remained below the 300,000 threshold, which is typically associated with a strengthening labor market. However, it is also a fact that the number of eligible Americans–due to the number of long-term unemployed who have already exhausted their benefits–has influenced the gauge alongside a change in the Labor Department’s survey methodology.

Economists polled by Reuters had forecast claims holding at 275,000 last week. The data covered the Labor Day holiday and claims tend to be volatile around holidays. A Labor Department analyst said there were no special factors influencing the data, and claims for the prior week were unrevised.

The four-week moving average of claims–widely considered to be a better measure of labor market trends as it irons out week-to-week volatility–decreased 3,250 to 272,500 last week. Still, the recent global stock market sell-off has lowered the probability of a Federal Reserve interest rate hike this week, which was self-imposed by the Federal Reserve Open Markets Committee.

The claims data for the week ended Sept. 12 included the period during which the government surveyed employers for the nonfarm payrolls portion of the September employment report. Overall, claims fell 13,000 between the August and September survey weeks, which usually indicates job growth. Last month, the economy added just 173,000 jobs in August, declining from July’s gain of 245,000. Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid fell 26,000 to 2.24 million in the week ended Sept. 5.