Just in Time for VP Debate: Labor Dept. Reports U.S. Jobless Claims Have Fallen to Four-Year Low (UPDATED)

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The number of Americans seeking unemployment aid plummeted last week to seasonally adjusted 339,000, the lowest level in more than four years, according to new data from the Labor Department.

The agency also said Thursday that weekly applications fell by 30,000 to the fewest since February 2008. The four-week average, a less volatile measure, dropped by 11,500 to 364,000, a six-month low.

"Weekly applications are a proxy for layoffs. They can fluctuate sharply from week to week. If they stay near last week's level, it would likely signal better hiring ahead," the Associated Press explains.

"When applications consistently drop below 375,000, it suggests that hiring is strong enough to lower the unemployment rate," the report adds.

Wait a minute, wait a minute: unemployment aid is at its lowest level since 2008? If you’re skeptical of today's report (or, as some in the media might say, a government data "truther"), you’re not alone.

"This is just getting stupid," the writers at Zero Hedge seethe. And they may have good reason to doubt the report.

As the Wall Street Journal notes:

... the report may not be as positive as the sharp drop indicates. A Labor Department economist said one large state didn't report additional quarterly figures as expected, accounting for a substantial part of the decrease.

"Great," Zero Hedge writes sarcastically, "but what was reported was a headline grabbing number that is just stunning for reelection purposes … The only point to have this print? For 2-3 bulletin talking points at the Vice Presidential debate tonight. Everything else is now noise."

"Jobless Claims beat by the most since May 2009 and is the lowest since Jan 2008 -- the new normal," the report adds.

Final Thought (h/t Zero Hedge): Now that we have all this great jobs data, can we end the Fed's open-ended, unlimited, $40-billion-a-month bond purchasing program (QE3)? Remember that? Remember when the Fed said QE3 would continue for as long as it took to improve the jobs situation? Well …

UPDATE -- CNBC's Kelly Evansis offers a possible explanation for the decline in applications:

Apols for the confusion here. Looks like all states DID report; one showed a drop instead of expected increase in quarterly refilings.

— Kelly Evans (@Kelly_Evans) October 11, 2012

It IS still the case that one state didn't process as expected. Also likely we'll see headline rebound next wk absent typical seas decline.

— Kelly Evans (@Kelly_Evans) October 11, 2012

So, (a) 1 state appears not to have processed normal seasonal workload; (b) seasonal spike didn't occur; (c) means rebound next wk likely

— Kelly Evans (@Kelly_Evans) October 11, 2012

That seems to be the case RT @peter_eller10 @kelly_evans so will likely have no effect on NFP # next month, throwing 2 weeks out?

— Kelly Evans (@Kelly_Evans) October 11, 2012

Just to be super, super clear: it *does* appear that one state did not process & report its typical seasonal workload. (see a/b/c tweet)

— Kelly Evans (@Kelly_Evans) October 11, 2012

Labor Dept did not estimate what state would have reported (understandably -- as it couldn't know).

— Kelly Evans (@Kelly_Evans) October 11, 2012

Okay, so which state didn't go through the normal data processing procedures and why? Representatives from the Labor Department have not yet responded to TheBlaze's request for comment.

UPDATE II -- CNBC confirms all states reported in but, as mentioned in the above, one did it a little differently:

The state did report weekly jobless claims but did not process and report its quarterly claims number (when many people have to reapply for benefits for technical reasons as opposed to being newly laid off). As a result, there wasn't the expected spike in claims that normally happens at the start of the quarter.

It is unclear why that happened or how unusual that is. What is clear is that the expected spike in claims around the start of each quarter was smaller this time than usual. Coupled with the seasonal adjustment (that expected a bigger increase), that pushed down the headline figure.

In other words, the drop of 30,000 last week had more to do with the lack of expected re-filings at the start of the fourth quarter than with any particular improvement in labor market conditions.

That also means that the decline which usually follows the spike won’t be as pronounced this time around, so the headline tally of jobless claims is likely to rebound next week.

[...]

The Labor Department appears to have had little choice in this matter, however; it couldn’t estimate what the one large state would or should have reported. Still, it may have been able to avoid more confusion had it more clearly articulated that in its weekly press release.

Still, it's puzzling that no one knows for sure which state's responsible for the decline. Business Insider thinks its California, but they have nothing to support this claim.

Follow Becket Adams (@BecketAdams) on Twitter

The Associated Press contributed to this report. This story has been updated.