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Economy in Brief

Initial Unemployment Insurance Claims Fall Again; Low Since Feb 2006
by Carol Stone January 18, 2007

Initial unemployment insurance claims continued to fall last week, decreasing 8,000 to 290,000, now the lowest level since last February. Consensus expectations had been for 310,000, which would have meant some reversal of the previous week's decline.

During the last ten years there has been a (negative) 77% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.

The four-week moving average of initial claims also fell, reaching to 308,000 (+3.7% y/y).

In contrast, continuing claims for unemployment insurance rebounded in the January 6 week, with a rise of 120,000 to 2,530,000, almost exactly reversing the prior two weeks' combined 112,000 drop.

The insured rate of unemployment returned to 1.9% after a dip to a downward revised 1.8% in the December 30 week. At the very beginning of 2006, the rate was 2.0%, but since February it has hovered at 1.9%, with the occasional 1.8%.

Unemployment Insurance (000s) 01/13/07 01/06/07 12/30/07 Y/Y 2006 2005 2004
Initial Claims 290 298 325 3.2% 313 332 343
Continuing Claims -- 2,530 2,410 -0.8% 2,459 2,662 2,924
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