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Economy in Brief

U.S. Initial Unemployment Insurance Claims Near The Highest Since 2002
by Tom Moeller September 18, 2008

Last week, initial claims for unemployment insurance rose to 455,000 from an unrevised level of 445,000 during the prior week. Except for a level at the beginning of last month which was raised by a program to locate and provide extra benefits to people eligible for jobless benefits, the latest was the highest during this cycle. It also was the highest level since 2002.

The latest figure covers the survey week for September nonfarm payrolls and claims rose 20,000 (4.6%) from the August survey period. During the last ten years there has been a 76% correlation between the level of initial claims and the m/m change in nonfarm payroll employment

The four-week moving average rose to 445,000 (37.7% y/y) and remained near the highest level since near the end of the 2001 recession. Last month, claims averaged 443,000.

A claims level below 400,000 typically has been associated with positive 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 fell 55,000 after a slightly revised 129,000 increase during the prior period. The four-week average rose to 3,461,000, the highest level since July 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 held stable w/w at 2.6%, the highest level since late-2003.

Yesterday's announcement by the Federal Reserve of measures "to improve the liquidity conditions in global financial markets" can be found here.

Unemployment Insurance (000s)  09/13/08 09/06/08 Y/Y 2007 2006  2005
Initial Claims  455 445 42.6% 322 313 331
Continuing Claims -- 3,478 36.2% 2,552 2,459 2,662
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