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Economy in Brief

U.S. Weekly Initial Jobless Insurance Claims Highest Since 2005
by Tom Moeller March 20, 2008

Initial claims for unemployment insurance last week surged 22,000 to 378,000. The latest was the highest level since September 2005 and claims during the prior week were revised up slightly. Consensus expectations had been for initial claims last week to rise just slightly to 359,000. So far in March claims have averaged 367,000, up 2.2% from the February average.

The latest weekly claims figure will be used by the Labor Department to survey March nonfarm payrolls. Claims rose 24,000 (6.8%) from the February survey period.

A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 76% 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 365,250 (12.7% y/y), also the highest since 2005.

Continuing claims for unemployment insurance rose a strong 32,000 (1.1%) during the latest week. That followed a 4,000 rise, which was revised down just slightly, during the prior period. Insured unemployment stood at its highest level since August 2004. 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 to 2.2%, its highest level since October 2005.

No Volatility, No Forecasting Power for the Term Spread from the Federal Reserve Bank of St. Louis can be found here.

Unemployment Insurance (000s)  03/15/08 03/08/08 Y/Y 2007 2006  2005
Initial Claims  378 356 18.9% 322 313 331
Continuing Claims -- 2,835 9.8% 2,551 2,459 2,662
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