· Initial
claims for unemployment insurance dipped last week to an expected 425,000
from 435,000 during the prior week. The latest was the third decline in
as many weeks.
· 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 dipped to 440,250 (35.6% y/y), the highest level since near the end of the 2001 recession 2001. During July claims averaged 393,000.
· 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 64,000.
The four-week moving average of continuing claims rose to 3,423,000
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.