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New Jobless Claims Unexpectedly Drop

New claims for jobless benefits unexpectedly dropped by 21,000 last week to 434,000 - its lowest level since July, the Department of Labor reported on Thursday.

But the news may be even better than a three-month low. In July there were special factors contributing to the lower number of new jobless claims; fewer than usual auto plants closed for the model-year retooling.

If we disregard July for those skewed numbers, the last time new jobless claims were as low as they were in the week ending October 23 was back in August 2008.

White House Press Secretary Robert Gibbs told a news briefing, “Obviously, any even week-to-week drop is good news.” He said that while new jobless claims levels are still “a decent amount above” levels from before the recession, they are “quite a bit” below the high water mark in March 2009.

The insured unemployment rate slipped to 3.5% for the week ending October 16, down 0.1 percentage point from the week before. The seasonally-adjusted number for insured unemployment was 4,356,000, down by 122,000 from the previous week.

The four-week moving average, which smooths out weekly volatility and gives a better picture of the overall trend, was 4,447,250 - a decrease of 38,500 from the previous week.

Puerto Rico continues to have the highest insured unemployment rate in the U.S. at 6.9%, followed by Alaska at 4.9%, Oregon at 4.1%, and Nevada at 4%. California, New Jersey, Connecticut, South Carolina, and Wisconsin also have high insured unemployment rates at 3.5% or higher.

Puerto Rico also had the largest increase in the number of new claims for the week ending October 16, with 1,115 more than in the previous week.

No other states had a very large increase in the number of new claims that week; Minnesota had the next largest increase of just over 500. Wisconsin, Florida, and Alabama all had an increase of about 650 between the three states.

California led with the largest drop in new claims, with 13,701 fewer than in the week before due to fewer layoffs in the service industry.

North Carolina had a decrease of 6,607 new jobless claims due to fewer layoffs in construction, trade, service, transportation, textile, petroleum, and lumber/wood industries.

The next highest decrease in the number of initial unemployment benefits were in New York, with 6,382 fewer new claims than in the previous week; Pennsylvania, which had a drop 5,248; and Texas, with 4,385 fewer claims than in the week before.

Overall, the number of initial claims fell by 1,000 or more in 17 states for the week ending October 16.

“The week-to-week claims, look, are a heartening bit of good news, and we certainly -- our hope is that it will certainly continue. And we’ll continue to watch that,” Gibbs said.

U.S. Department of Labor
The White House
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Thursday, 09 July 2020

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