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Economy in Brief

U.S. Weekly Initial Jobless Insurance Claims Fell But Still Near Cycle High
by Tom Moeller October 9, 2008

Last week, initial claims for unemployment insurance fell 20,000 from the previous week's cycle high of 498,000, which was a level revised up slightly.The four-week moving average also moved to a new high for this cycle of 482,500 (52.2% y/y). During September initial claims averaged 474,000.

A claims level below 400,000 typically has been associated with positive job growth. 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.

By state through August, larger y/y increases in initial claims occurred in North Dakota (101.8%), Louisiana (96.8%), Maine (85.9%), Georgia (70.7%), Indiana (59.5%), Ohio (45.1%), South Carolina (40.1%) and California (23.0%).

Gains in initial claims have been more moderate in Michigan (16.8%), Virginia (14.4%), Wisconsin (12.7%), New York (9.6%), Pennsylvania (8.3%), Massachusetts (6.3%) and New Jersey (2.7%),

Continuing claims for unemployment insurance during the latest week rose 56,000 following an upwardly revised 60,000 increase during the prior period. The four-week average of claims rose to 3,563,250, 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 held steady at 2.7% for the third consecutive week, also the highest level since late-2003.

The geography of research and development activity in the U.S.* from the Federal Reserve Bank of Philadelphia is available here.

Unemployment Insurance (000s)  10/04/08 09/27/08 Y/Y 2007 2006  2005
Initial Claims  478 498 51.3% 322 313 331
Continuing Claims -- 3,659 43.9 2,552 2,459 2,662
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