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Economy in Brief

U.S. Initial Unemployment Insurance Claims Fell
by Tom Moeller January 10, 2008

Initial claims for unemployment insurance unexpectedly fell 15,000 last week to 322,000. The 20,000 decline during the prior week was little revised. The latest level was the lowest in two months, although seasonal adjustment difficulties during the holiday season were indicated by the Labor Department to have been a factor in the drop.

The four week moving average of initial claims, a measure which smoothes out most of the series' w/w volatility, fell slightly to 341,000 (6.9% y/y) but remained near the highest level since 2005.

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.

Continuing claims for unemployment insurance fell 52,000 after a little revised 41,000 surge during the prior week. The figure provides some indication of workers' ability to find employment.

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

The insured rate of unemployment fell back to 2.0% after the one week rise to 2.1%.

Cyclical Movements Along the Labor Supply Function from the Federal Reserve Bank of Boston can be found here.

Today's speech titled Financial Markets, the Economic Outlook, and Monetary Policy by Federal Reserve Chairman Ben S. Bernanke can be found here.

Unemployment Insurance (000s)  01/04/08 12/29/07 Y/Y 2006  2005 2004
Initial Claims  322 337 4.2% 313 331 343
Continuing Claims -- 2,702 12.0% 2,459 2,662 2,924
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