WASHINGTON (AP) -- The number of Americans seeking unemployment benefits plummeted last week 31,000 to a seasonally adjusted 292,000. But the drop was mostly because of technical issues in two states that delayed the processing of applications.
The Labor Department said Thursday that the less volatile four-week average fell to 321,250, the lowest in six years.
A government spokesman says the steep drop occurred because two states upgraded their computer systems last week and did not process all their applications. "This is not necessarily an indication of a change in labor market conditions," he said.
The spokesman would not identify the states, but said one was small and one large.
The broader trend in unemployment benefit applications has been favorable. Prior to the glitch applications had dropped 7 percent in the previous three months. However, the decline in jobless claims has not been followed by rapid hiring.
"It’s hard to believe that claims can keep declining indefinitely without a commensurate pickup in job growth," said Dan Greenhaus, chief global strategist at BTIG.
But unemployment remains painfully high at 7.3 percent more than four years after the Great Recession ended. And the economy grew at a modest 2.5 percent annual rate in the April-June quarter.
That’s made the unemployment applications data less reliable for predicting job growth than in past recoveries.
JPMorgan economists point to the October-December quarter in 2004, just three years after the 2001 recession ended. Unemployment applications were down to 329,000, in line with the current level reported over the past four weeks. Yet the unemployment rate was 5.4 percent and the economy grew at 3.4 percent annual rate.
About 4.3 million people received unemployment benefits in the week ended Aug. 24, the latest figures available. That’s about 125,000 fewer than the previous week.