Glitches blamed for big drop in jobless claims

• Initial claims dropped by 31%2C000 to a seasonally adjusted 292%2C000 in week ended Sept. 7
• Less volatile four-week average at 321%2C250%2C the lowest in six years
• Drop was mostly due to glitches in two states that delayed processing of applications

The number of Americans seeking jobless benefits fell below 300,000 for the first time since 2006, but the government attributed the surprising plunge to computer-related delays instead of a sudden improvement in the labor market.

Initial claims dropped by 31,000 to a seasonally adjusted 292,000 in the week ended Sept. 7, the Labor Department said Thursday. But the department said two states, which were not identified, made changes to their computer systems that resulted in some claims not being processed in time.

The level of claims may have also been affected by the shorter work week during the Labor Day holiday.

Economists had expected claims to rise to 330,000 from an unrevised 323,000 in the last week of August.

Meanwhile, the average of new claims over the past four weeks, a more reliable gauge than the volatile weekly number, fell by 7,500 to 321,250. That's the lowest level since October 2007.

Applications are a proxy for layoffs. Layoffs have been falling since 2009 and in July reached the lowest level on records dating back to 2000, according to a separate government report released this week.

The decline in layoffs has been encouraging for anyone who has a job. But for the millions of Americans who are unemployed, it has not translated into rapid hiring. Nor has it coincided with stronger economic growth.

Unemployment was a high 7.3% in August, more than four years after the Great Recession ended. And the economy grew at a modest 2.5% annual rate in the April-June quarter.

That's made the unemployment applications data less reliable for predicting job growth than in past recoveries.

Historically, falling applications have pointed to a pickup in hiring and stronger economic growth.

Contributing: The Associated Press