What seems like an outsized rise in claims this week is most likely just a correction of the outsized drop of 30,000 claims reported last week. A Labor spokesman said then that the drop was at least partly the impact of one large state not filing a report. That state was California. But the comment from the department didn't make the real situation clear. Here's what actually happened.
The state did report weekly jobless claims but did not process and report its quarterly claims number (when many people have to reapply for benefits for technical reasons as opposed to being newly laid off). As a result, there wasn't the expected spike in claims that normally happens at the start of the quarter.In other words, last week's claims and this week's claims are added noise in what is already a fairly noisy report. No big plunge in first-time claims last week, and no big spike this week. One more reason the running four-week average is preferred by most economists.
It is unclear why that happened or how unusual that is. What is clear is that the expected spike in claims around the start of each quarter was smaller this time than usual. Coupled with the seasonal adjustment (that expected a bigger increase), that pushed down the headline figure.
In other words, the drop of 30,000 last week had more to do with the lack of expected re-filings at the start of the fourth quarter than with any particular improvement in labor market conditions.
Thus, next week's claims numbers are likely to fall within the same 360,000-380,000 range they generally have been in for the past six months.
For the week ending Sept. 29, the department reported that the total number of people collecting unemployment benefits in all programs, state and federal, was 5,001,985, down 42,664 from the previous week. For the comparable week of 2011, the number was 6,694,493. The drop reflects both people who got new jobs and those who exhausted their benefits without finding work.