Initial unemployment claims drop by 27,000

The private sector added 67,000 jobs in August but overall employment dropped 54,000 as the federal government continued to let go of temporary census workers. The drop boosted the national unemployment rate to 9.6 percent. 

Economists argue that jobless claims need to drop into the low 400,000s or high 300,000s to reflect stronger job growth in the private sector.

Although claims are well below their high of 651,000 in March 2009, they still aren't low enough to signal strong improvement in the job market.

The total number of people receiving unemployment insurance was little changed, while those getting extended payments rose.

Meanwhile, the number of people receiving unemployment insurance dropped by 2,000, to 4.48 million, in the week ended Aug. 28. That figure was less than analysts expected.

The number of people who have exhausted their extended jobless benefits — available up to 99 weeks in some states — increased by about 29,300, to 5.47 million, in the week ended Aug. 21.