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Initial Jobless Claims in Steepest Drop in 9 Weeks

First-time claims for unemployment insurance fell a sharp 14,000 to 374,000 for the week ended June 30, the largest drop in nine weeks, the ""Labor Department"":http://www.dol.gov/ reported Thursday. The prior week's total was revised up to 388,000 from the originally reported 386,000. Economists surveyed by Bloomberg had expected the report would show 386,000 initial claims.

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The drop in claims was the second week-week improvement and came on the weekend heading into the July 4 holiday, usually a slower period for layoffs according to Department of Labor seasonal factors which are used to adjust raw claims data. The seasonal adjustment factor for the report issued Thursday was the highest since January; high seasonal adjustment factors reduce reported claims filings though in this case the unadjusted data also showed a decline in claims, but not as steep.

Continuing claims â€" reported on a one week lag â€" rose to 3,306,000 from the prior week's 3,302,000 â€" revised up from the originally reported 3,296,000.

The four week moving average of initial claims â€" which smooths the weekly fluctuations â€" fell 1,500 to 385,750.

The four week moving average of continuing claims fell 3,000 to 3,304,250.

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The report will have no impact on the Employment Situation report to be released Friday. That report is based on data collected by the ""Bureau of Labor Statistics"":http://www.bls.gov/ for the week of the month including the 12th calendar day.

From mid-May to mid-June, the four-week moving average of initial claims rose 12,000 hinting at another weak jobs report for June. The four-week moving average for continuing claims rose 38,000 from mid-May to mid-June, the first increase since the change from mid-August to mid-September last year.

Meanwhile Thursday, payroll processor ADP reported payroll private sector payroll jobs rose 176,000 in June

Even with the drop in claims â€" the largest since the end of April â€" the labor market has yet to gain solid footing. This report was the first in six weeks to be under 380,000, the longest streak of 380,000-plus filings since last fall when claims were generally declining. This streak took place when initial claims were slowly increasing.

Initial claims averaged 381,846 during the second quarter, up from 369,231 in the first quarter.

The total number of people claiming benefits in all programs â€" reported on a two-week lag - for the week ending June 16 was 5,869,607, a decrease of 20,439 from the previous week. According to the latest BLS report, 12.72 million people were officially counted as unemployed in May.

States reported 2,628,712 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending June 16, a decrease of 16,805 from the prior week, the Labor Department said. There were 3,256,523 claimants in the comparable week in 2011.

According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending June 23 were in California (+8,239), New Jersey (+4,894), Massachusetts (+3,873), Michigan (+3,692), and Connecticut (+2,598), while the largest decreases were in Pennsylvania (-7,865), Maryland (-2,265), Ohio (-1,588), Wisconsin (-1,544), and Georgia (-1,398).

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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