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Economy in Brief

Initial Claims for Unemployment Insurance Jumped
by Tom Moeller November 2, 2006

Initial claims for unemployment insurance jumped 18,000 last week to 327,000 from a little revised level during the prior period. Consensus expectations had been for 310,000 claims during the latest week.

There apparently were no special factors to explain the increase but it occurred after the period, which includes the twelfth of the month, when the nonfarm payrolls survey occurs. Therefore Consensus estimates of a 125,000 rise in October jobs, to be released tomorrow, should not change.

During the last ten years there has been a (negative) 78% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.

The four-week moving average of initial claims rose to 311,250 (-8.2% y/y).

Continuing claims for unemployment insurance fell 27,000 following a revised 4,000 decline the prior week that initially was reported as a slight increase.

The insured rate of unemployment revisited the six year low at 1.8% after being steady most of 2006 at 1.9%.

Are Two Employment Surveys Better than One? from the Federal Reserve Bank of St. Louis is available here.

Unemployment Insurance (000s) 10/28/06 10/21/06 Y/Y 2005 2004 2003
Initial Claims 327 309 1.6% 332 343 403
 Continuing Claims -- 2,415 -12.2% 2,662 2,924 3,532
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