The number of Americans seeking unemployment benefits fell by 31,000 last week, but the U.S. Labor Department warned the lower numbers reflected a technical glitch in the way joblessness is reported in two states.
The number of applications was estimated at 292,000, reflecting a trend to fewer layoffs in the U.S. economy that began in 2009.
But a Labor Department official noted that last week's sharp drop was "not necessarily an indication of a change in labour market conditions."
Two unnamed states — a small one and a large one, according to officials — were upgrading their computer systems and as a result all their data might not have been included in the calculation, the spokesman said.
GDP growth not reflected in hiring
Unemployment in the U.S. remained at a high 7.3 per cent in July. The rate is being closely watched by markets, with investors fearing the Federal Reserve will begin tapering off its $85-billion US a month bond-buying program when joblessness falls.
The U.S. economy grew at a modest 2.5 per cent from April to June, but the GDP growth numbers are not yet reflected in strong hiring. The nation added a tepid 169,000 jobs in August.
In August, the number of long-term unemployed who had been jobless for 27 weeks was 4.3 million. That fell by 743,000 since 2012, but teens were still seeing unemployment of 22.7 per cent and among black Americans, joblessness stood at 13 per cent.
Keith Hall, a former head of the Bureau of Labor Statistics who now works for a conservative think tank, says he believes the U.S. federal government's monthly jobs report lowballs the number of unemployed.
Hall told New York Post columnist the official unemployment rate is off by as much as three percentage points because of the large number of Americans who are not even applying for work.
The U.S. has had high unemployment since the 2008 financial crisis, and that long stretch of layoffs and low hiring has left many workers discouraged, he said.