U.S. Jobless Claims Fell in Latest Week

New measurement method could be a factor in weekly figures, along with slowly improving labor market.

New applications for unemployment benefits fell last week, a possible sign of a slowly improving labor market and the impact of a new measurement method.

Weekly initial claims for jobless benefits fell by 130,000 to a seasonally adjusted 881,000 in the week ended Aug. 29, the Labor Department said Thursday. The number of people collecting unemployment benefits through regular state programs, which cover most workers, decreased by 1.24 million to about 13.3 million for the week ended Aug. 22.

The latest data is in line with a general trend of improvement since spring, but also reflects a new methodology to adjust for seasonal factors. Under the new method, updated seasonally adjusted data should be more in line with the unadjusted data, J.P. Morgan economist Daniel Silver said. Unadjusted claims have most weeks been lower than the more widely reported adjusted figure since early March.

Seasonal adjustments are meant to account for regular swings in layoffs that occur during certain times of the year, such as around holidays. The coronavirus, however, didn’t align with historical patterns and likely led seasonal adjustments to overstate the actual number of weekly unemployment claims, economists say.

A Labor Department spokesman said the new methodology will be applied to Thursday’s report and those released going forward. He said data published before the Thursday release won’t be revised at this time.

Forecasting firm IHS Markit estimates that if the Labor Department had changed its data methodology at the beginning of the pandemic, the cumulative number of seasonally adjusted jobless claims could be about 4 million lower since mid-March.