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Economy in Brief

U.S. - Rise in Initial Unemployment Insurance Claims Leveled Out
by Tom Moeller June 5, 2008

Initial claims for unemployment insurance fell slightly last week to 357,000 from an upwardly revised 375,000 during the prior week. Consensus expectations had been for claims to remain unchanged.

The four week moving average of initial claims fell slightly week-to-week to 368,500 (19.4% y/y) and the recent average is up just slightly from April when claims averaged 364,000. These numbers are down from March when initial claims averaged 375,000.

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.

In selected states, initial claims in California have been roughly stable (16.3% y/y) since last Fall. In New York claims also have been stable recently (11.7% y/y) and they have trended slightly lower in Ohio (21.1% y/y). In Pennsylvania initial claims recently have trended slightly higher (25.9% y/y) although in Florida the trend also is up (40.8% y/y). The trend in claims has been up sharply in Michigan (62.0% y/y). These figures are available in Haver's REGIONW database.

Continuing claims for unemployment insurance fell 16,000 after an upwardly revised 41,000 increase during the prior week. The latest level was near the highest since March 2004. The four week average of continuing claims rose to 3,085,750 and the number 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 held steady at 2.3% for the sixth week. That was the highest since 2004.

Yesterday's speech by Fed ChairmanBen S. Bernanke at Harvard University, Cambridge, MA is available here.

Unemployment Insurance (000s)  05/31/08 05/24/08 Y/Y 2007 2006  2005
Initial Claims  357 375 14.8% 322 313 331
Continuing Claims -- 3,093 22.4% 2,552 2,459 2,662
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