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Economy in Brief

U.S. Initial Jobless Insurance Claims Fell Sharply
by Tom Moeller April 10, 2008

Initial unemployment insurance claims last week retraced all of the prior period's surge. The 53,000 decline to 357,000 followed a little revised 39,000 rise during the prior week and dropped claims to their lowest level since early March. The decline outpaced Consensus expectation for a lesser decline to 380,000and clearly indicated that the early Easter Holiday played a role in boosting the seasonally adjusted level of claims during the prior week.

Nevertheless, the two week average of initial claims remained elevated at 384,000, near its highest since 2005.

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 378,250 (19.4% y/y), also its highest level since 2005.

Continuing claims for unemployment insurance rose by 3,000. The increase followed an 85,000 worker surge during the prior week which was revised down just slightly. Insured unemployment was at its highest level since mid 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 remained elevated at 2.2%.

Yesterday's testimony by Federal Reserve Board Governor Randall S. Kroszner on the Federal Housing Administration Housing Stabilization and Homeownership Act can be found here.

Unemployment Insurance (000s)  04/04/08 03/28/08 Y/Y 2007 2006  2005
Initial Claims  357 410 8.8% 322 313 331
Continuing Claims -- 2,940 17.3% 2,552 2,459 2,662
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