Initial Jobless Claims Slump as Two States Underreport

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, a Labor Department report showed today in Washington. The median forecast in a Bloomberg survey called for 330,000 applications.The decrease in filings doesn't signal a change in job-market conditions because most of it was caused by computer-network conversions in the two states, according to a Labor Department spokesman. The pace of job cuts has waned since the end of last year, setting the stage for faster payroll and income growth that would help propel consumer spending.

"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."Stocks were little changed as investors weighed the prospect for cuts in Federal Reserve stimulus and watched developments on Syria. The Standard & Poor's 500 Index fell less than 0.1 percent to 1,688.54 at 11:01 a.m. in New York.

Estimates for jobless claims in the Bloomberg survey of 50 economists ranged from 315,000 to 350,000. The four-week moving average of claims, a less volatile measure than the weekly figures, fell to 321,250 last week, the lowest since October 2007, from 328,750.
Computer SystemsThe Labor Department spokesman said one large and one small state retooled their computers and reported fewer applications than usual. The spokesman didn't name the two states.

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