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Economy in Brief

U.S. Initial Claims For Unemployment Insurance Rose
by Tom Moeller October 2, 2008

Initial claims for unemployment insurance rose to 497,000 from an upwardly revised 496,000 during the week prior. The latest was the highest level since the recession of 2001.

The four-week moving average jumped to 474,000 (48.8% y/y) which also was the highest level since the last recession. During August initial 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 rose another 48,000 after a 95,000 rise during the prior period. The four-week average of claims rose to 3,528,500. That was the highest level since 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 2.7%. The rate for the previous week was upwardly revised and it is the highest level since late-2003.

Technology shocks, employment, and labor market frictions from the Federal Reserve Bank of Boston is available here.

Unemployment Insurance (000s)  09/27/08 09/20/08 Y/Y 2007 2006  2005
Initial Claims  497 496 53.4% 322 313 331
Continuing Claims -- 3,591 40.5 2,552 2,459 2,662
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