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Economy in Brief

U.S. Initial Unemployment Insurance Claims Up
by Tom Moeller June 12, 2008

Initial claims for unemployment insurance rose 25,000 last week to 384,000 from an upwardly revised level of 359,000 during the prior week. Consensus expectations had been for a lesser increase to 365,000 claims.

The four week moving average of initial claims rose slightly week-to-week to 371,500 (19.4% y/y) and the recent average was up 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.

Continuing claims for unemployment insurance rose 58,000 and made up all of a revised 28,000 decline during the prior week. The latest level was the highest since February 2004. The four week average of continuing claims rose to 3,099, 250 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 rose to 2.4% after six weeks at 2.3%. The latest was the highest since mid-2004.

Lessons for Central Bankers from a Phillips Curve Framework is yesterday's speech by Fed Vice Chairman Donald L. Kohn and it is available here.

Unemployment Insurance (000s)  06/07/08 05/31/08 Y/Y 2007 2006  2005
Initial Claims  384 359 22.3% 322 313 331
Continuing Claims -- 3,139 25.6% 2,552 2,459 2,662
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