WASHINGTON (MarketWatch) – The number of people who filed new requests for U.S. unemployment benefits surged to 374,000 in the first week of October – the highest level in six months – because of ongoing application-processing snafus in California and government shutdown-related layoffs, the Labor Department said Thursday.
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The 66,000 increase in seasonally adjusted claims for the week ended Oct. 5 marked the biggest spike since last November. Economists surveyed by MarketWatch had expected claims to rise to 312,000 from an unrevised 308,000 in the prior week.The leap in claims largely reflects recurrent computer problems in California, a Labor spokesman said, but some states also reported higher layoffs in private-sector industries such as defense that rely heavily on federal contracts. California’s switchover to a new computer system in early September has resulted in prolonged delays in working through claims applications.The latest claims report, however, does not include furloughed government employees. They file applications through a separate program and do not show up in the Labor Department’s main claims report. The average of new claims over the past month, usually a more reliable gauge, jumped 20,000 to 325,000.
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Meanwhile, the government said continuing claims declined by 16,000 to a seasonally adjusted 2.91 million in the week ended Sept. 28. Continuing claims reflect the number of people already receiving benefits.Initial claims is one of the few federal economic reports released during a government shutdown because the information is collected by the states.The Burning Platform