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Economy in Brief

U.S. Initial Claims for Jobless Insurance Highest in Four Weeks
by Tom Moeller September 4, 2008

Initial claims for unemployment insurance rose unexpectedly last week to 444,000 from 429,000 during the prior week. The latest level was the highest in four weeks.

The four-week moving average dipped again w/w to 438,000 (34.7% y/y), still the highest level since near the end of the 2001 recession 2001. During July claims averaged 393,000.

A program to locate people eligible for jobless benefits may have continued to play a role in last week's elevated level of claims. Congress approved the extra benefits in June.

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.

Continuing claims for unemployment insurance during the latest week ticked up another 6,000 after an upwardly revised 70,000 jump during the prior week. The four-week moving average of continuing claims rose to 3,400,250, the highest level since late-2003.

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 was stable at 2.6%, the highest level since late-2003.

Unemployment Insurance (000s)  08/30/08 08/23/08 Y/Y 2007 2006  2005
Initial Claims  444 429 38.7% 322 313 331
Continuing Claims -- 3,435 32.7% 2,552 2,459 2,662
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