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Economy in Brief

Initial Jobless Insurance Claims Drop Suggests Labor Market Firmed
by Tom Moeller October 21, 2004

Initial claims for unemployment insurance dropped 25,000 last week following a revised gain of 16,000 the week prior. The decline to 329,000 was to the lowest level in over a month and compared to the Consensus expectation for 345,000 claims.

The latest figure is for the October survey period for nonfarm payrolls and initial claims fell 22,000 (6.3%) from the September period.

During the last ten years there has been a (negative) 73% correlation between the level of initial claims and the m/m change in payroll employment.

The 4-week moving average of initial claims fell to 348,250 (-11.1% y/y).

Ongoing claims for unemployment insurance fell 8,000 following a 51,000 decline the prior week that was revised from -11,000.

The insured rate of unemployment remained at 2.2% versus the downwardly revised level of the prior week.

"Why Do Americans Work So Much More Than Europeans?" by Nobel Prize winner Edward C. Prescott can be found here.

Unemployment Insurance (000s) 10/16/04 10/09/04 Y/Y 2003 2002 2001
Initial Claims 329 354 -15.9% 402 404 406
Continuing Claims -- 2,798 -19.7% 3,531 3,570 3,018
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