Initial jobless claims slump as two U.S. states underreport

Jobless claims in the U.S. declined last week to the lowest level since April 2006 as work on computer systems in two states caused those employment agencies to report fewer applications.

First-time claims for unemployment insurance fell by 31,000 to 292,000 in the week ended Sept. 7, which also included the Labor Day holiday, according to Labor Department data released today in Washington. The median forecast in a Bloomberg survey called for 330,000 applications. An agency spokesman said that the upgrades played a major role in the drop in claims.

Fewer dismissals would be a precursor to an increase in hiring once demand strengthens and the effects of federal budget reductions become less pronounced. While the pace of job cuts has waned since the end of last year, faster payroll and income growth would help propel the consumer spending that accounts for about 70% of the economy.

“Stronger job growth may be on the horizon,” said Millan Mulraine, director of U.S. rates research at TD Securities in New York. “When we start seeing improvement in the labor market, I think that will provide another tailwind for confidence, and spending, going forward.”

Estimates in the Bloomberg survey of 50 economists ranged from 315,000 to 350,000.

Stock-index futures were little changed after the figure. The contract on the Standard & Poor’s 500 Index expiring this month fell less than 0.1% to 1,688.6 at 8:55 a.m. in New York.

Computer Networks

No states estimated jobless claims last week, the Labor Department spokesman said as the report was released to the press. A larger state and a smaller one that retooled their computer networks still provided the Labor Department with applications counts, though those tallies were smaller than typical. He also said that the decrease in filings probably didn’t signal a change in labor-market conditions.

Another report from the Labor Department showed the cost of goods imported into the U.S. was unchanged in August. No change in the import-price index followed a 0.1% gain in July. The median forecast called for a 0.5% advance.

The cost of imported goods minus fuels fell 0.2% last month after a 0.4% decrease. Prices of autos made overseas fell 0.1%. They were down 1% in the 12 months ended in August, the biggest year-over-year slump since May 1990.

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