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Economy in Brief

U.S. Initial Claims for Jobless Insurance Lowest Since September
by Tom Moeller January 17 2008

Unexpectedly, initial claims for jobless insurance dropped 21,000 last week to 301,000 after an unrevised 12,000 decline during the week prior. The latest level was the lowest since late September and contrasted with expectations for a rise to 332,000 claims. The recent claims figures may still be distorted by seasonal adjustment difficulties this time of year.

The latest claims figure covers the survey week for January nonfarm payrolls and claims fell 47,000 (-13.5%) from the December period.

The four week moving average of initial claims, a measure which smoothes out most of the series' w/w volatility, fell to 328,500 (+5.6% y/y).

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 rose 66,000 and reversed a revised 69,000 drop 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 rose back to the cycle's high of 2.1%.

The Fed's latest Beige Book covering regional economic conditions can be found here.

Unemployment Insurance (000s)  01/12/08 01/05/07 Y/Y 2006  2005 2004
Initial Claims  301 322 4.9% 313 331 343
Continuing Claims -- 2,751 11.3% 2,459 2,662 2,924
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