Jobless claims near six-year low after computer glitches are fixed

<i>This article has been corrected. See the note below for details.</i>

WASHINGTON -- With reporting problems in California and Nevada resolved, new jobless claims last week settled at near a six-year low of 305,000, the Labor Department said Thursday.

The figure provides a more accurate sense of the jobs market than the claims figures the previous two weeks, which were distorted because computer upgrade problems in the two states led them to under-report their initial claims for unemployment benefits.

The new read on job losses came as the Commerce Department said the economy expanded at a moderate 2.5% annual rate from April through June. The third and final report on second-quarter growth was unchanged from the previous estimate and below economists’ expectations of 2.7% growth.

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The closely watched figures on initial claims have been skewed by computer problems in two key states.


Claims surprisingly plunged to 292,000 the week ending Sept. 7, down sharply from the 323,000 level the previous week, the lowest level reported since April 2006. It was the first time that reported claims were below 300,000 since 2007.

But the number reported for that week was depressed by computer troubles that prevented California and Nevada from processing all their claims.

Claims increased to 310,000 the week ending Sept. 14, but the states still were dealing with the issue.

California’s Employment Development Department had a large backlog of first-time claims after problems with the upgrade of its computer system over Labor Day weekend. In addition, benefit checks to about 124,000 people have been delayed.

The Labor Department said Thursday the states had informed them the reporting backlogs had been cleared were resolved and the reporting backlogs cleared. California’s payment backlog will not be resolved until Tuesday, according to Marty Morgenstern, the state’s secretary of Labor and Workforce Development

In the week that ended Sept. 14, the latest for which state numbers are available, California reported an increase of 22,611 jobless claims and Nevada had 2,504 more claims than the previous week.

The 305,000 claims last week were well below economists’ expectations of 330,000. Excluding the skewed figure for the week ending Sept. 7, which was revised up slightly to 294,000, last week’s reading was the best since September 2007.

Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York, said the claims number last week appeared to be an accurate read on the jobs market and indicated significant improvement.

“It looks like the labor market kicked it up a notch in September,” he said.

A more accurate read will come Oct. 4, when the government releases the jobs report for September. Given last week’s jobless claims figures, it’s possible that could show a “monster” increase in jobs, Rupkey said.

[For the Record, 12:55 p.m. PDT Sept. 26: An earlier version of this post stated that computer glitches in California’s unemployment benefits system had been resolved. According to the Labor Department, state officials said the backlog in reporting first-time claims for unemployment benefits had been cleared. However, many people still have not received unemployment benefit checks because of the computer problems.]


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