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Economy in Brief

U.S. Initial Unemployment Insurance Claims Surged
by Tom Moeller November 29, 2007

Initial claims for unemployment insurance surged much more than expectations to the highest level since early this year. The 23,000 rise last week to 352,000 followed a little revised 12,000 decline during the week prior. The early timing of this year's Thanksgiving holiday may have affected the latest figure.

A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last six 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 335,250 (3.3% y/y) and that was up 3.5% from the prior four weeks.

The largest increases in initial claims for the week ending Nov. 17 were in Texas (+1,097), Kentucky (+797), Idaho (+341), Arkansas (+219), and Wisconsin (+209), while the largest decreases were in Michigan (-6,493), California (-5,905), Puerto Rico (-3,882), New Jersey (-3,011), and Virginia (-1,542).

Continuing claims for unemployment insurance surged 112,000 from the prior week, the largest one week increase since early this year, and it followed modest decline in the prior three weeks.

The continuing claims numbers lag the initial claims figures by one week.

The insured rate of unemployment rose slightly to 2.0% from 1.9% during the prior week.

Unemployment Insurance (000s) 11/24/07 11/17/07 Y/Y 2006 2005 2004
Initial Claims  352 329 0.9% 313 331 343
Continuing Claims -- 2,665 8.2% 2,459 2,662 2,924
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