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Economy in Brief

U.S. Initial Claims for Jobless Insurance Up Moderately
by Tom Moeller July 17, 2008

Initial claims for unemployment insurance rose a moderate 5.4% last week to 366,000 from a little revised level during the week prior. The increase fell short of Consensus expectations for a larger rise to 380,000 claims.

The latest figure is for the survey week for July nonfarm payrolls. Jobless claims were down 18,000 (4.7%) from the June 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. Over the longer period of time, the level of claims for jobless insurance has not trended higher with the size of the labor force due to a higher proportion of self-employed workers who are not eligible for benefits.

As a result of the latest weekly decline in initial claims, the four-week moving average fell to 376,500 (+20.5% y/y). During June claims averaged 391,000.

Continuing claims for unemployment insurance during the latest week fell by 81,000 and reversed about all of the prior week's rise. The decline, nevertheless, left the four-week average of continuing claims still rising. It increased 16,500 to another cycle high of 3,142,750 which was roughly a quarter higher than a year ago and the highest level since early 2004.

Continuing claims provide some indication of workers' ability to find employment and they lag the initial claims figures by one week.

The insured rate of unemployment fell back to 2.3%.

Unemployment Insurance (000s)  07/12/08 07/05/08 Y/Y 2007 2006  2005
Initial Claims  366 346 18.4% 322 313 331
Continuing Claims -- 3,122 21.9% 2,552 2,459 2,662
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