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Initial jobless claims, still volatile, dropped 23,000 last week

October 25, 2012|By Jim Puzzanghera
  • Job seekers wait to enter at the Rigzone Oil & Gas Career Fair in San Antonio, Texas, on Tuesday. The Labor Department on Thursday reported that new claims for unemployment benefits dropped by 23,000 last week.
Job seekers wait to enter at the Rigzone Oil & Gas Career Fair in San Antonio,… (Eddie Seal /Bloomberg )

WASHINGTON -- First-time claims for unemployment benefits continued their recent roller-coaster ride last week with the second big drop in the last month, but economists said the overall trend is consistent with moderate -- though not great -- job growth.

The mixed economic picture also was clear in Thursday's Commerce Department report on durable goods.

Though orders for big-ticket items such as jetliners increased 9.9% in September from the previous month, a key measure of business activity that strips out volatile defense and aircraft orders was flat last month.

Initial jobless claims fell 23,000 to 369,000 for the week ending Saturday, down from a revised 392,000 the previous week, the Labor Department said Thursday. That figure was a major increase from the week before, when claims had unexpectedly plunged to a 4 1/2-year low of 342,000.

Big shifts are common in the volatile weekly unemployment data, particularly at the start of a new fiscal quarter. But the recent swings have been more dramatic than usual and have triggered allegations the Obama administration was cooking the numbers in the weeks before the presidential election.

Labor Department officials said there was no manipulation.

Last week's number was consistent with analysts' expectations of 370,000 initial claims. And the less-volatile four-week average increased slightly to 368,000. With the fourth quarter of the year fully underway, the claims probably will remain more steady at about that level, which is consistent with monthly job growth of about 125,000.

"Unemployment claims fell back to earth today," said Chris Rupkey, chief financial economist for the Bank of Tokyo-Mitsubishi in New York. "There is no worsening of economic conditions."

But Rupkey said he was worried about capital orders by businesses contained in the durable goods report.

"Business capital spending is not bouncing back after taking a hit in June and July," he said. And that does not bode well for third quarter economic growth.

The government will report its first estimate of third quarter gross domestic product  Friday.

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