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Economy in Brief

U.S. Initial Claims For Jobless Insurance Highest Since 1982, Continuing Claims Reach Another Record
by Tom Moeller February 5, 2009

U.S. labor market conditions became more bleak last week as initial claims for unemployment insurance jumped 35,000 to 626,000. Moreover, the prior week's modest increase was revised up slightly and the latest level by far surpassed Consensus expectations for 580,000 initial claims. Initial claims continue to be the highest since late during the sharp recession of 1981-82. During that recession, real GDP fell by 2.9% peak-to-trough.

The Labor Department indicated that the largest increases in initial claims for the week ending January 24 were in Wisconsin (+1,355), Rhode Island (+689), Virginia (+682), Oklahoma (+406), and Puerto Rico (+314), while the largest decreases were in Florida (-14,703), California (-12,074), Michigan (-11,639), Georgia (-9,949), and Ohio
(-9,926).

Labor market stress was further indicated by a rise in continuing claims for unemployment insurance to another record level. The series dates back to 1966. During the week of January 24 they rose 20,000 on top of 151,000 and 102,000 increases during the prior two weeks. The four-week average of continuing claims rose 44,000 to 4,672,000. Continuing claims provide some indication of workers' ability to find employment and they lag the initial claims figures by one week.

Though the latest level of continuing claims was a record, the labor force has grown as well. Therefore, the insured rate of unemployment was not at a new high. It remained stable at 3.6% which was, however, the highest since 1983. The highest insured unemployment rates in the week ending January 17 were in Michigan (8.9 percent), Idaho (6.6), Oregon (6.6), Pennsylvania (6.2), South Carolina (6.0), Wisconsin (6.0), Alaska (5.6), Nevada (5.5), Indiana (5.4), and Montana (5.3).

Unemployment Insurance (000s)  01/31/09 01/24/09 01/17/09 Y/Y 2008 2007 2006 
Initial Claims 626 591 585 78.3% 420 321 313
Continuing Claims -- 4,788 4,768 72.7% 3,342 2,552 2,459
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