A big complicating factor though in the jobless claims number is California. The state is not accepting new applications until early October while it processes a large backlog and investigates reports of widespread fraud. That could be exaggerating how many people are actually applying for or receiving benefits since California is the nation’s largest state.
Continuing jobless claims declined by 980,000 to a seasonally adjusted 11.8 million in the seven days ended Sept. 19. That’s also the lowest level since late March when the virus was shutting shut most of the U.S. economy.
“Jobless claims declined slightly more than expected but remained stubbornly high amid mounting layoff announcements. Claims have been artificially skewed lower in this week’s data as a result of California putting applications on hold to revamp its system,” said Eliza Winger.
First-time claims for unemployment insurance totaled 837,000 last week. Economists surveyed by Dow Jones had been expecting 850,000. This was the fifth consecutive week that claims were under 1 million after staying there for five months following the COVID-19-related economic shutdown in mid-March.