· Initial
claims for unemployment insurance dipped last week to 450,000 from an
upwardly revised 460,000 during the prior week. The latest levels were
the highest since March of 2002 and the most recent surpassed Consensus
expectations for 432,000 claims.
· A program to locate people eligible for jobless benefits may have continued to play a role in last week's elevated level of claims.
· The four-week moving average increased to 440,500 (39.6% y/y), the highest level since near the end of the 2001 recession 2001. During July claims averaged 383,440.
· A
claims level below 400,000 typically has been associated with growth in
nonfarm payrolls. During the last ten years there has been a (negative)
76% correlation between the level of initial claims and the m/m change
in nonfarm payroll employment. Over the longer period of time, the level
of claims for jobless insurance has not trended higher with the size of
the labor force due to a higher proportion of self-employed workers who
are not eligible for benefits.
· Continuing claims for unemployment insurance during the latest week jumped 114,000 after a little revised 25,000 rise during the prior week. The four-week moving average of continuing claims rose to 3,273,750 which was its highest level since late-2003.
· Continuing claims provide some indication of workers' ability to find employment and they lag the initial claims figures by one week.
· The insured rate of unemployment rose further to 2.6%, the highest level since late-2003.
· Thoughts About the Phillips Curve is a paper presented by Paul A. Samuelson and it is available here.