Computer network changes trigger big fall for US jobless claims
US jobless claims dropped more than 30,000 over the previous week, according to a report from the Labor Department. However, the drop has little to do with improving labour market conditions, as work on computer networks in two states caused those employment agencies to report fewer jobless claims last week. According to a Labor Department spokesman, the pace of jobless cuts was inflated after one large state and one small state underwent computer network conversions. The official jobless claims of 292,000 were the lowest level in more than seven years.
The number of unemployed persons continuing to receive benefits declined to 2.871 million in the week ending August 31, a drop of more than 70,000.
Job growth over the past two months has disappointed forecasts, according to official reports from the Labor Department. Last month the US economy added 169,000 payrolls after adding only 104,000 the previous month. Job growth and labour force exists over the previous two months sent the unemployment rate down 0.2 percentage points to 7.3 percent.
Stronger job growth is likely over the horizon, as the US economy continues to gain traction. However, analysts doubt whether summer employment growth was enough to shift Fed monetary policy. The majority of economists surveyed by Bloomberg expect asset tapering to commence next week after the FOMC policy meetings, although the pace of the taper is expected to moderate at $10 billion. The stimulus has helped pull the economy out of recession, lifting the Standard & Poor’s 500 up more than 150 percent in four years.
The S&P 500 declined close to six percent in May and June after Fed Chairman Ben Bernanke first hinted at the possibility of a 2013 taper. Prior to the recent seven-day rally, the gauge slumped more than 4.5 percent after hitting a record high in early August.
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