July 7, 2011 – WASHINGTON (Reuters) - New U.S. claims for unemployment benefits fell more than expected last week, government data showed on Thursday, but distortions associated with the holiday weekend and a government shutdown in one state made it difficult to get a clear view of the labor market.
Initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 418,000, the Labor Department said.
Economists polled by Reuters had forecast claims dropping to 420,000 from a previously reported 428,000. The prior week's figure was revised up to 432,000.
The data has as no bearing on the government's closely watched employment for June, scheduled for release on Friday and expected to show that nonfarm payrolls increased 90,000 last month after rising only 54,000 in May.
While the improvement in claims at the start of the third quarter could be hopeful sign that conditions were now in place for the economy to regain the momentum lost in the first half, the report itself does not offer a clear read of the labor market.
A Labor Department official said given Monday's Independence Day holiday, California and Virginia had provided partial estimates. In addition, the department had to make estimates for four states and territories.
The data also included about 2,500 claims from state employees in Minnesota following the shutdown on Thursday of the state government.
It was the 13th straight week that claims have been above 400,000, a level that is usually associated with a stable labor market.
The four-week moving average of unemployment claims, a better measure of underlying trends, fell 3,000 to 424,750.
The number of people still receiving benefits under regular state programs after an initial week of aid dropped 43,000 to 3.68 million in the week ended June 25.
The number of people on emergency unemployment benefits declined 44,183 to 3.26 million in the week ended June 18, the latest week for which data is available. A total of 7.46 million people were claiming unemployment benefits during that period under all programs, down 61,327 from the prior week. (Reporting by Lucia Mutikani, Editing by Andrea Ricci)